The year FY 2004-05 saw videoconferencing, as an alternative to physical meetings, fast catching on in India. From being merely a concept a few years back, the Indian videoconferencing endpoints market showed a remarkable growth last year-it reached Rs 31 crore registering a growth of 23% over the FY 2003-04 market size of Rs 25 crore.

A host of factors combined to drive this spectacular growth-heightened awareness about the benefits of videoconferencing transforming it from just an embellishment in an organization to an enterprise necessity, enhancement of ISDN and IP services, establishment of unswerving videoconferencing standards and finally the decreasing costs of technology. In addition, factors like increased travel problems and financial restraints encouraged the uptake of videoconferencing to provide remote lectures, remote seminars, distance learning and even telemedicine.

Also, the availability of advanced features such as embedded MCUs (Multipoint Control Units) increased the usage of videoconferencing end points. Not to forget, the increasing availability of broadband networks and extensive endorsement by bandwidth providers have promoted a bandwidth-intensive application like videoconferencing. Even the increasing migration from ISDN to IP networks provided the requisite thrust during the year.

One glaring trend visible in the FY 2004-05 videoconferencing end points market was the total domination of group equipment over desktop systems. While group equipment sales totaled Rs 28.8 crore contributing 93% of the overall market, desktop-based systems accounted for only the remaining 7%. The situation was no better the previous year; in FY 2003-04, group equipment accounted for Rs 23.2 crore translating to 92.9% of the total market of Rs 25 crore. The primary reason behind group equipment contributing a higher share to the overall videoconferencing endpoints revenue pie was their high prices compared to desktop units, as well as the continuing apathy to use desktop systems as a substitute for telephones. While the average price of a desktop system was Rs 26,000, the average price of a group system was Rs 2.11 lakh.

Though it set up its first office in India only in FY 2003-04, Polycom still emerged as the numero uno in the videoconferencing endpoints market with a 60% market share. The host of videoconferencing endpoint solutions it offered helped Polycom achieve this exalted status-VSX 3000, VSX 7000, SoundStation 2 and V500 all emerged as best sellers owing to its strong channel network. Though Tandberg was the second in the pecking order, it could not increase its market share owing to its high pricing as well as Polycom's well-established distribution network.

Also, the emergence of Aethra provided a stiff competition for both Tandberg and Polycom. The Aethra products distributed by Siemens in India gave the similar features as provided by both Polycom and Tandberg but were priced much cheaper than the market leaders. On the other hand, D-Link's videophones (also in wireless mode) introduced in FY 2003-04 registered a high growth in terms of units sold; D-Link's videophones are much cheaper than its competitors Polycom and Tandberg. No wonder, even channel partners such as Vigneshwara E-biz started making their own videophones. Even Chinese vendors like Huawei and ZTE made their presence felt by providing videophones at lower prices (see table "How They Stacked Up").

While the videoconferencing endpoints market might be restricted to Rs 31 crore in FY 2004-05, the overall videoconferencing services market was sized at a much higher Rs 250 crore. Nearly half of this would come from multimedia projectors (not included in videoconferencing endpoints), the rest would come from accessories like telephones, microphones, speakers as well as integrator charges. Though this meant that videoconferencing was still a fairly expensive proposition in India, different verticals like the government, judiciary, education and even corporates in banking and retail opted for extensive adoption.

In terms of revenue, the government led other verticals comfortably-the National Informatics Center (NIC), with the mandate to conduct all government-related videoconferencing events, was the pioneering contributor. In FY 2004-05, NIC provided a strong network of more than 50 ISDN based videoconferencing locations as well as connecting 206 cities across India, including the capitals of all north-eastern states over its high speed satellite based network called NICNET. President APJ Kalam has been an active votary of NIC's videoconferencing services-many of his addresses at major seminars during the year, like the Nasscom Annual Summit, International Conference on Cryptology, National Judicial Academy and the Global Project Management Conference were conducted through videoconferencing from Rashtrapati Bhavan.

Other significant usage of videoconferencing during government functions included the Srinagar-Muzaffarabad bus service launch, Military Operation Room in South Bloc, tele-education launch for North-East and Lakshadweep, launching of South Asian Medical Journal between Delhi and Karachi as well as the post-budget press conference at the Press Information Bureau. Disaster management operations following the Mandhardevi Temple tragedy at Satara, Maharashtra was another effective usage of videoconferencing. On the international front, Commerce Minister Kamal Nath held the WTO meeting with Australia, Bazil, US and EU through NIC's videoconferencing services. In addition, a host of states set up their videoconferencing network during the year to further the progress of e-governance.

Other than the government, even corporates, particularly the IT and BPO companies, recorded widespread adoption of videoconferencing to interact with their clients thereby reducing travel time and costs. Genesis IT Innovations, a Bangalore-based service provider, has successfully serviced clients like Accenture (Bangalore), Citibank Countrywide Finance (Mumbai), EDS (Bangalore), IBM (Bangalore), Phoenix, Symphony Services and Digital amongst others. On the retail front, the story of Reliance Webworld deserves particular mention during FY 2004-05.

The nationwide chain of Reliance, WebWorld retail stores, included a Real BroadBand Center that showcased broadband connectivity through a host of applications, prominent among them being video chat and conferencing. Videoconferencing in WebWorlds was used for a host of innovative applications-from job interviews to matrimonial proposals to even karva chauths.

Telemedicine as a trend fast caught up during FY 2004-05 with deployment by some of the super specialty hospitals enabling diagnosis of patients even at remote locations. The Fortis Hospital at Mohali used videoconferencing whereby doctors sitting there monitored patients coming to its node hospitals in Amritsar and Ludhiana real-time. Even the Apollo Hospitals in Hyderabad deployed Polycom videoconferencing solution, taking telemedicine to the remote corners of Andhra Pradesh. Distance learning and judiciary were two other verticals growing strongly-IGNOU, Anna University and Indira Gandhi Institute were some of the prominent adopters. In Andhra Pradesh, 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 has been provided by Stan Power Technologies. Also the Jaipur and Jodhpur benches of the Rajasthan High Court were linked through videoconferencing during the year.

Though desktop systems still constituted a miniscule 7% of the market share, webconferencing showed first signs of catching the attention of India Inc. The undisputed leader in Web conferencing during the year was Silicon Valley-based WebEx Communications, strengthened particularly after acquiring CyberBazaar, a Bangalore-based teleconferencing firm, for $4 mn. Some of the other leading webconferencing service providers included Placware, Centra Software, RainDance Communications, Latitude Communications, Web Conferencing Central, MSHOW.com, iMeet, Netbriefings and Encounter Collaborative amongst others.

Rajneesh De