Videoconferencing enjoys steady growth

High costs and poor local infrastructures have hampered the adoption of videoconferencing in the Middle East. However, a number of large enterprises are beginning to deploy the technology.

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By  Vijaya Cherian Published  May 25, 2003

|~||~||~|Videoconferencing has enjoyed steady growth in niche markets for over a decade. However, according to analysts at In-Stat/MDR, the technology is yet to become an integral part of mainstream business communications, despite its reduced costs and increased network return on investment (ROI).

“The videoconferencing industry has just come through an amazing surge of growth, which lasted for about 24 months, but it has tapered off as the global economy has slowed,” says Gerry Kaufhold, a principal analyst at In-Stat/MDR.

“To sustain growth in this type of economy, videoconferencing needs to become a component that can be bolted on to more popular and widespread applications, such as unified messaging, web conferencing, electronic meetings and voice over IP (VoIP),” he adds.

Most emerging leaders in the industry, such as Polycom, which has almost 70% of the world’s market share, Tandberg and Sony are working towards making the technology more valuable to the typical business user.

“There have already been many transitions in the market space that are making videoconferencing more appealing to other segments of the market,” says Nitesh Naidu, assistant manager, applications, Sony Broadcast & Professional Middle East & Africa.

A key transition has been the development of more advanced videoconferencing capabilities. These features, which include a networked projector, networked video conference, and a mesh of other devices such as an audio conferencing system and interactive touch screen plasma screens, enable a person to be present in the room over a video conference link that is based on a LAN, a public or private network or ISDN. However, this is possible only if the connections are available and this is often not the case in the Middle East.

“Most of my clients want to connect between GCC countries like Kuwait, Qatar, Bahrain, Saudi Arabia and the UAE, but the major problem is the connection,” says Manoj Pillai, business development manager of Dubai-based videoconferencing solutions provider, Audiviz.

“I recently had a client who specifically wanted to connect between Kuwait and the UAE. But Kuwait does not have lease lines. Therefore, if the client has to invest so much money on infrastructure to get this working, he prefers not to use it,” he adds.

Another deterrent is the cost of the technology. “Polycom, for instance, is expensive. They have to break the price barrier. It’s a bit of a chicken and egg situation. They say when the market grows we’ll make it cheaper and people say when it becomes more affordable, we’ll use it,” says Pillai.

Currently, only large companies in the region with multiple branches and offices that need to interact with each other on a daily or weekly basis, use videoconferencing. “For the rest, once a month travel is not such a big deal,” explains Pillai.

Despite these factors, vendors are optimistic that videoconferencing will experience steady growth in the Middle East. Given the recent political and social events in the world, Naidu of Sony Broadcast thinks that most businesses in the region will open their mind to the benefits of video conferencing.

“I am expecting a triple digit rate growth in sales year on year. Last year, we grew by a 100% in videoconferencing, but this year, we are expecting to grow by 200%,” he says.

Moreover, most countries in the region are correcting their bandwidth problems, improving internet connectivity and extending their ISDN services to include a wider footprint. According to In-stat/MDR, “with the emergence of Internet Protocol solutions for the videoconferencing industry, there is hope that videoconferencing technologies and applications can begin to gradually work their way toward this goal”.

The analyst house predicts that these solutions coupled with cost-cutting mandates to cope with the failing economy will gradually pave the way for web conferencing. However, vendors are not so hopeful.

“Web conferencing will not take off now. Maybe it will do so in another couple of years, when video compression has been fine tuned to be accommodated on the internet, which operates on low bandwidth. Then it will be more cost effective. Until then, customers will have to make do with video conferencing,” says Uday Kumar, business unit manager for voice and video, Vtel, Al Rostamani Communications. ||**||

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