Global telco service providers seizing opportunity in managed telepresence

MELBOURNE, AUSTRALIA: A new report from global advisory and consulting firm Ovum, finds that managed telepresence services for multinational corporations will provide a significant stream of new revenues for global telecoms service providers in the next five years, even if operators are not all exploiting the opportunity yet.

According to the report, entitled, “Business video 2010-14: chasing revenues in managed telepresence”, only a handful of operators offer global managed telepresence services today. But the number will grow steadily as more global network operators, as well as regional operators, follow the lead taken by AT&T, BT and Orange Business Services.

“Managed telepresence is proving to be a value-add revenue stream for major telcos,” says David Molony, principal analyst at Ovum, and author of the report. “It really allows them to exploit their global services network assets as well as all their expertise in videoconferencing.”

Ovum estimates that managed service charges in the new installed base of telepresence videoconferencing systems for MNCs will add a modest $77.4 million to network operator revenues in 2009. But this figure will accelerate over the next five years, with cumulative revenues for global managed telepresence services totalling $1.7 billion from 2010 to 2014.

Add to that the receptiveness of MNCs towards telepresence, which many see as the new keystone for their unified communications programmes, and the industry has a standout service offering.

“Telepresence is at the apex of the unified communications opportunity for managed telecoms providers, and not just the equipment vendors,” says Molony.

In fact, if anything it is the service providers that stand to gain most through the rollout of telepresence services now reaching 100+ sites in the biggest single deployments at MNCs. So far there is no sign of a challenge from the major systems integrators that compete with telcos in so many areas of global services.

“Some operators will take a volume approach, like some vendors,” says Molony. “Others will try harder to maintain the longer-term value of managed sites.”

At some point, the value of the service ‘rentals’ becomes greater than the annual sales of equipment, and in managed telepresence, Ovum thinks that point could come as soon as 2012, because many of the biggest MNCs will have placed their orders by then. Service revenues of $359.5 million will outstrip the value of equipment sales at $272.5 million in 2012, and will grow to $450.3 million in 2014.

Inevitably there will be challenges for global telcos, particularly as telepresence technology shifts from hardware-based systems to software-based installation as part of integrated and centralized UC packages.

Telcos will respond by growing the range of features in the managed service, for example by adding user controls in session management, as well as realtime business tools such as RoI estimators for the cost-benefit analysis of a single telepresence meeting vs travel costs.

Managed telepresence services to exceed $360mn in 2011

NEW YORK, USA: Telepresence, a kind of video conference providing the realistic sensation that all participants are actually in the same room, is a rapidly growing industry. The technology, however, is very expensive -- prohibitively so, for the majority of its potential users. Hence there is a growing trend toward offering telepresence as a managed service.

According to ABI Research vice president Stan Schatt, “The growth of managed telepresence services raises the prospect that soon virtually anybody, from multinational corporations to private individuals, may be able to benefit from this remarkable audiovisual experience.”

What makes telepresence more useful than phones, email, or ordinary videoconferencing? The key is the realism: in complex business negotiations body language, eye contact, and vocal realism are still critical. And for individuals communicating with distant loved-ones, there’s no substitute.

Today, telepresence managed services are still primarily used by large enterprises. But it won’t be long before small-medium businesses and eventually ordinary citizens can use the service. Schatt believes that “The price for telepresence managed services will eventually come down to where any mid-level manager can do it.”

There will also be public facilities, often in hotels or conference centers, where one can use telepresence for a fee. “That’s going to be very attractive to small businesses,” says Schatt. “Take a small business that has a supply chain relationship with an Asian company. The fee for an hour in a telepresence room is always going to be less than the cost of sending a key executive all the way to China. And fewer air miles are better for the environment.”

Many telepresence systems today are still not easily interoperable: another reason to let a service provider handle the technicalities. “We’re already seeing AT&T, BT, and Nortel being very active in this area,” says Schatt, “and India’s Tata Communications has started offering telepresence facilities in partnership with Cisco.”