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SINGAPORE: The market for high-end quality videoconferencing such as telepresence is set to grow by over 60 per cent this year.
This will be partly driven by more global companies doing business with one another and potential reductions in travel budgets.
However, experts said because there is a limited number of customers who can afford such high-end equipment, there are new business models emerging.
High-quality video conferencing facilities have helped companies like Cisco cut costs.
Peter Borup Jakobsen from Cisco Systems' Collaboration Architecture Marketing, said: "Cisco has had a very firm plan to roll out telepresence in all our locations around the globe to increase internal collaboration, and increase collaboration with customers and partners.
"A clear example is how our travel budget now is US$250 million compared to US$750 million a few years ago. And on top of that, we have grown significantly and reduced our travel costs simply by using these type of technologies to conduct meetings internally, so you did not have to fly across the globe for maybe one meeting with a customer."
The cost of setting up these rooms is relatively expensive - typically going up to half a million US dollars each. Lower-end video-conferencing equipment costs between US$8,000 and US$35,000.
Still, demand for telepresence rooms in the Asia-Pacific is forecast to grow over 60 per cent this year to hit revenues of US$73.3 million, according to research firm Frost and Sullivan. Sectors that may drive this growth include education, finance and healthcare.
However, demand may fall in the next few years due to a limited customer base for such high-end set ups. Growth is expected to moderate to 22.9 per cent for each year till 2016, to hit revenues of US$110.1 million, according to Frost & Sullivan.
"It's targeted at the Fortune 500, and Global 1,000 companies that have significant travel budgets that they can choose to invest in a very rich experience system. There is still significant growth for the next three to five years before it reaches that plateau," Frost & Sullivan associate director, ICT practice, Shivanu Shukla, said.
Observers said new options are emerging to drive growth in the video-conferencing market.
"If you look at telepresence systems, they are on average US$300,000 and obviously (a) cost prohibitive number. You are seeing new business models emerge where service providers are investing in that technology and creating sort of public telepresence rooms, where as an enterprise you can go in and book it for three hours for your meeting and connect to your partners in other regions.
"Those are ways that we are beginning to see cost prohibitive technologies being made available to a larger enterprise audience, and we see that as a trend, (it) is definitely expected to pick up with more service providers offering this," he said.
Just last year, Southeast Asia's first public telepresence room was set up in Manila's central business district by telco PLDT (Philippine Long Distance Telephone Company) and Datacraft. It is charging users a rental fee of S$500 per hour.
And the first such facility in Singapore opened in June by Tata Communications and Rendezvous Hospitality Group.
Observers believe other business models such as one based on lease-as-you-use will grow in popularity.
Frost & Sullivan believes the next generation nationwide broadband network may help boost take up in Singapore, but the impact will be limited.
Mr Shukla said: "The cost of the bandwidth and availabilty of the bandwidth is obviously a big consideration, having NGNBN will defininitely spur more usage of this and spur reduced cost. That will be applicable for enterprises and that will definitely drive the industry forward.
"But one thing to note is that NGNBN is fairly local in Singapore. People still need to connect to their offices back in India, China, New Zealand and those costs might not be significantly impacted because of this."
-CNA/wk
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