Videoconferencing, as an alternative to physical meetings, is fast catching on in India, and the market is poised for handsome growth. Rajneesh De & Stanley Glancy take a look at what’s cooking on the videconferencing front and evaluate the cost-effectiveness of using the videoconferencing option.

Consider for a moment the geographic spread of a typical corporate entity in India. The headquarters are in Mumbai, the marketing director operates from Bangalore, there is a sales team in Gurgaon, an R&D centre in Pune, two overseas marketing directors in Denver and Frankfurt and a resident consultant in Sydney. A highly lucrative marketing deal has come the company’s way. In order to clinch it, it is essential for several of the above personnel to sit together, brainstorm, and formulate a winning strategy. Given the multi-locational co-ordination required, organising such a meeting would not only be horrendously expensive, it would also be a scheduling nightmare if indeed it were possible at all. That’s why more and more companies are turning to videoconferencing as a cost-effective option, and the good news is that the concept is now picking up rapidly in India as well. With videoconferencing, meetings like the one above can be conducted at a fraction of the expenditure that would have been otherwise incurred.

Considering the impact this could have on a company’s bottom line, it is no wonder that the videoconferencing market in India, currently sized at Rs 200 crore, is growing at the rate of 25 percent and is estimated to reach Rs 300 crore within three years. Out of this total, multimedia projectors account for around 50 percent of the market, while the rest comes from videoconferencing equipment. The videoconferencing hardware market in India, volume-wise, is expected to be 3,000 units of different types for the year 2002.

Polycom and Tandberg are the leading brands of videoconferencing hardware in India with Godrej & Boyce and Neutron Infotech being the national level distributors for both these brands. Polycom has recently acquired PictureTel, the erstwhile leader in the videoconferencing market, and has also appointed Siemens as another distributing partner. By volume, Tandberg claims to enjoy 30 percent of the Indian market share. Neutron claims it commanded a 56 percent share of the market for the year 2001, a figure that is expected to grow to 63 percent in the current year. Godrej & Boyce currently enjoys 15 percent of the total market share, with multimedia projectors contributing just over half its total revenues. It expects to increase its share to 20 percent of the total market size in 2002. Apart from the industry leaders, there are around 15-20 regionalplayers, besides a substantial grey market that controls about 30 percent of the total videoconferencing space.

The technology

How does videoconferencing work? According to Sorab Parekh, general manager-marketing, Godrej & Boyce, a typical facility consists of many elements. Firstly, there is the endpoint or the conferencing system, which comes in many types, depending on its applications. All conferencing systems use CODEC, which stands for coder-decoder—a device, which converts and compresses an analog audio-video signal into digital data and then sends it over a digital line; the decoder reverses the process at the receiving end. All videoconferencing systems work in a full-duplex mode i.e. encoding and decoding of audio-video in both directions simultaneously. One can use a choice of networks for conducting videoconferencing over wide area networks (WAN) such as ISDN lines or satellite-based leased lines. Says Kristin Blix, vice president-marketing, Tandberg Data Systems, “It is perfectly possible to use bandwidth of 128 Kbps for a good quality conference. However data rates of 384 Kbps may be needed for near-TV-quality video.”

Discreet’s Kedia believes the scope for video conferencing in India, particularly in the training segment, is huge

The next logical evolution in videoconferencing has been the adoption of multipoint videoconferencing. With Multipoint Conference Server (MCS), up to five sites can conference with each other simultaneously in a ‘Continuous Presence’ mode where each site sees the remaining four sites in different quadrants of the display monitor. The screen is effectively broken into quadrants, with a choice of who appears in each demarcated window of the screen. If the number of sites in a multi-point meeting is more than five, then one of the four quadrants can be defined as voice activated. What this means is that the person who speaks appears in one of the squares on a rotational basis, allowing users to listen to and view the speaker, while at the same time evaluating the reactions of the others. Reveals Sudhir Deva of Neutron Infotech, “Demand for multi-point capabilities is growing fast as large organisations have multiple sites located at geographically dispersed places, which require a lot of co-ordination between persons on these sites.”

Range of solutions

What are the different kinds of videoconferencing solutions available in India? Various manufacturers of professional business-level videoconferencing systems from across the world are being represented in India today providing a wide range of group videoconferencing solutions. On offer are systems ranging from the most exclusive to the standard, with special solutions for telemedicine and distance education. Most vendors offer state-of-the-art videoconferencing equipment, professional installation and maintenance and a full range of value-added services including integrated videoconferencing solutions as well as set-top systems to be used along with regular television sets.

Godrej & Boyce’s PArekh predicts that in two years, 70 percent of video conferencing will take place over IP

The product range includes multimedia projectors, wireless projectors, electronic write boards, slide projectors, teleconferencing and videoconferencing products, overhead projectors, etc, addressing the entire multi-conferencing arena. However, the most prevalent video communication tool in India today is through the Internet via webcams provided by players like Logitech and Discreet. But the quality provided by such devices is far from satisfactory for business/professional applications. For example, Internet-based videoconferencing works typically on 5-6 frames per second as against the 22-25 frames per second that is desirable for the full-motion video required in business applications.

Videoconferencing is spreading to a diverse range of users and industries including distance learning education, banks, software companies, the hospitality industry, pharmaceuticals, and manufacturing. Even the government is actively using videoconferencing for various e-governance initiatives. Some of the users are segmented by the applications that they use, like telemedicine, telejudiciary (implemented on the Tandberg system at Bihar in the central judiciary at Patna and surrounding districts). Says Pankaj Kedia, regional manager for South Asia at Discreet, “We feel there is a large market for education especially for those wanting to conduct campuswide training.” Discreet, according to Kedia, is also looking at the consumer market, especially NRI families who are spread across the globe and who want something more than the telephone or the Net.

Next wave

With IP being the key to the video explosion, IP-based videoconferencing is the next wave in this space. The global availability of Integrated Services Digital Network (ISDN) data lines allows increased videoconferencing usage. But there are many inherent disadvantages—like stressful deployment, higher usage fees, mediocre reliability, difficulty in managing—surrounding ISDN. On the other hand, some of the benefits of IP-based videoconferencing solutions are lower end-point costs, low or non-existent usage fees, “free” internal calls, higher quality video/audio, improved reliability, ad-hoc convenience, dynamic bandwidth allocation, network convergence, centralised management, simplified billing and cost allocation, improved scalability within the enterprise. The major disadvantage of such a solution is that the video communication can be used only within the enterprise (LAN/WAN) whereas the ISDN-based solution has a much wider ‘approach’. In India, most conferencing currently takes place over ISDN lines, though IP is fast catching up. Parekh predicts that within two years, over 70 percent of videoconferencing in India will happen over IP.

The videoconferencing market in India is definitely looking up post September 11. The prolonged economic slowdown coupled with fears following the terrorist attacks put a brake on air travel. As a result alternatives like videoconferencing have become increasingly popular. The slower growth in businesses has prompted many an organisation to embark upon austerity measures, and the deployment of videoconferencing can yield significant cost saving for adopting companies. Agrees Kedia, “The downturn has been good for the videoconferencing business. With cost cutting doing the rounds, most people now prefer videoconferencing.”

Evaluating cost reduction

But how much reduction in costs can be achieved through videoconferencing? In the Indian context, the concept of videoconferencing is a relatively new one. Hence no precise method of accounting for the cost savings accrued has been formulated. But in the international context, a 1998 study conducted by Worldcom indicates that the total savings achieved by converting a business travel meeting into a videoconference is more than $2,130 a month. Taking the optimal escalation of 10 percent per year in the hard costs (flights, hotel, car service, food) and the soft costs (cost of saved employee time) the total saving can be estimated to be $3,120 which is equivalent to about Rs 1.5 lakh. This figure multiplied by the number of employees who need to travel, generates a quantum of cost saving that is hard to ignore. Also, this survey estimates that an employee who converts 50 percent of business travel meetings to videoconferencing can gain an additional 20 percent effective work time.

However, apart from reduction in costs, videoconferencing offers other benefits too. Managing the global company in today’s world is one, feels Deva. Videoconferencing helps large multinationals operate in truly worldwide environments, and facilitate communications between individual sites, groups and divisions. It also facilitates new working practices. Video- and data-conferencing enables virtual team working. Geographically dispersed peer groups, such as engineers or product designers can be brought together at short notice. Parekh adds access to remote expertise as another benefit. The natural corollary is that faults in manufacturing facilities can be quickly identified and fixed.

What are the constraints in the adoption of videoconferencing in India? Almost everyone is unanimous that bandwidth is the major bottleneck. According to Kedia, though most solutions are capable of providing quality output at low bandwidth, it is a bottleneck when it comes to streaming of live video. Though with broadband coming to India with much fanfare, things are looking up for the videoconferencing industry. Other than bandwidth, the main constraints are the availability and reliability of transmission media, the cost of usage of such transmission media, low proliferation of IP, high initial cost of procurement (due to high level of import duties), the low awareness of the technology and the absence of a precise method/quantum for justifying the cost savings accrued due to implementation of videoconferencing solutions. But as these constraints are addressed in the coming months, videoconferencing is likely to make even deeper inroads into corporate India.

Videoconferencing for jail reform

A unique application of videconferencing is operational at Courts in the state of Andhra Pradesh. Here, videoconference links are provided between jails and courts, a measure that helps ‘produce’ undertrials before magistrates without their physical presence. The video linkage facility between the Chanchalguda central jail, which has more than 1,600 undertrials, and the Nampally City Criminal Courts here has been provided by Stan Power Technologies at a cost of Rs 150,000.

Television sets and digital video cameras have been installed at both the ends and connected through Integrated Services Digital Network (ISDN) lines. The facility solves a major problem faced by the police in providing armed escorts to undertrials while taking them from jails to courts. The shortage of escort personnel had also resulted in many undertrials languishing in jails indefinitely. The other benefits of the new system would be that the prisoners would have less chance to escape and a lot of time and money would be saved in transportation.

The electronic video linkage has eased the burden on the police forces. The National Human Rights Commission (NHRC) has also appreciated the state government for providing this facility. The undertrials are hopeful that the videoconference facility would help in early disposal of cases. They are also expected to speak more freely with magistrates through this facility.