Videoconferencing on the up

The annual revenue of the videoconferencing services companies for 2006 almost doubled to $607 million from $308 million in 2005. As the technology continues to improve and more and more IP based solutions become available videoconferencing is becoming increasingly common

“In our recent survey of UK businesses* we found that the popularity of videoconferencing is increasing rapidly. 15%of UK organisations report using some form of it, an increase of 3% in just 6 months,” says John Bosnell, Senior Analyst at Point Topic.

The rise in the annual revenue goes side by side with the slight increase in the monthly average revenue per user (ARPU) which grew from $668 in 2005 to $679 in 2006. Glowpoint is one example. A videoconferencing specialist its annual revenue reached $19.5 million slightly up from $18 million in the 12 months 2005 to 2006 with ARPU of $630 up more than 20%.

This is against the backdrop of rapidly decreasing unit prices. A two-room system, used to connect two sites of a company, cost up to $30,000 in 2001. The same system was likely to cost less than $5000 in 2007. Service subscriptions on online videoconferencing services are rapidly growing in popularity, with prices falling from over $200/month for a basic package to less than $100.

Suppliers are increasingly looking to value add to help maintain their ARPU. While the cost of basic videoconference room devices starts at $2000, subscription to a relatively fully-featured conferencing service with high definition, ‘video dial tone’ and an operator are still at a level where there are good margins to be made.

“It’s a challenging time when prices are dropping, but with life size and total telepresence solutions starting to appear and penetration on the up there’s plenty of room for the market to grow,” concludes Bosnell.

*BroadBand User Survey: Business. Survey 2 March 07, Survey 3 October 07.

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For more information and associated charts and tables, please contact:

Point Topic: Oliver Johnson
Email: oliver {at} point-topic(.)com
Tel. +44 (0) 20 7812 0506

About Point Topic

Point Topic is an analyst company focusing entirely on broadband. Point Topic’s international services have a global reputation for providing the most up-to-date and authoritative user statistics, supplier profiles and applications reports on DSL, FTTx, cable and other broadband services worldwide.

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