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SINGAPORE: Any businessman will tell you, nothing beats a face-to-face meeting.
However, as companies tighten their belts, more are turning to video and tele-conferencing in a bid to cut international travel costs.
Research conducted last month by IDC Asia-Pacific showed that 10 per cent of businesses surveyed hoped to install video or tele-conferencing facilities in 2009.
Experts say that figure may now double in the wake of recent financial turmoil.
An analyst at IDC, Kenneth Liew, said, "The slowdown will actually affect the financial institutions, which are usually the key customers for the telcos, so that area might slow down slightly. But there are other new areas that are promising, like tele-conferencing (and) video-conferencing service.
“SingTel is actually providing services (with) high-definition conferencing… Such companies (telcos) have actually seen a growth as companies try to cut costs and be more cost efficient."
A recent survey showed that if a company senior manager is to cut travelling by 10 to 20 per cent, this can pay back the cost of setting up a video or tele-conferencing system within a year.
StarHub and SingTel have already seen a 20 per cent jump in video and tele-conferencing usage by customers.
It is not just an uptake in video and tele-conferencing that is keeping Singapore's telcos steady. Consumer and retail demand is not expected to waver too significantly despite a technical recession.
Senior vice-president of DMG & Partners Securities, Terence Wong, said, "In terms of consumers, we believe that it is going to be more resilient, because if you look at the prices of mobile phone, it is not exactly a big ticket item so most people can still afford it. Usage is unlikely to drop. The telcos are likely to continue raking very, very healthy cash flows from this business."
Analysts hope the telcos' comparatively steady nature will continue ringing in attractive dividend yields for their shareholders, which have recently averaged about 8 per cent compared to a 5 per cent market average.
- CNA/yt
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