APAC firms to spend $804M on video conferencing

Driven by increasing focus on cost-cutting and productivity, amount will account for 21 percent of global market in 2016, as focus with China and India forecasted to be major players, reveals Ovum report.

Businesses in the Asia-Pacific region are expected to spend US$804 million on video conferencing in 2016, accounting for 21 percent of the global market, according to a new report released Friday by Ovum.

Revenue from business video conferencing in the region will grow at a compound annual growth rate (CAGR) of 7.8 percent from 2011 to 2016, higher than the global CAGR of 5.8 percent, noted the research firm.

It also pointed to India and China as major growth markets in the region, where the two economies will each register 16 percent annual growth over the next five years.

Richard Thurston, an analyst with Ovum, said in the report: "Enterprises are seizing the huge opportunity that video conferencing offers them to cut costs and improve productivity by reducing business travel. They are starting to use video conferencing much more frequently because of ongoing economic concerns, continued efforts to reduce their carbon footprint, enhancements in video technology and price reductions that are improving the business case."

Ovum also noted that immersive video conferencing, or telepresence, will grow faster than traditional video conferencing services. The high-end video conferencing technology requires custom-built rooms where calling parties at both ends can view each other as life-size images on screens.

"The improved quality of telepresence in terms of both visual and audio quality is resonating strongly with many large businesses," said Thurston.

According to Ovum, the Asia-Pacific telepresence market will grow by almost 21.9 percent to generate revenues totaling US$226 million in 2016.

It added that businesses in the region will also increase their spending on third-party managed services from operators, systems integrators and equipment vendors at a CAGR of 13.5 percent, to assist in the installation of telepresence systems which Ovum noted are complex to manage.

It added that several global organizations such as HSBC, GlaxoSmithKline and News Corporation have made orders to deploy telepresence equipment.

Ovum also predicted that China's video conferencing market will generate US$231 million in revenue in 2016, while Japan will hit US$224 million, Australia at US$81 million and South Korea at US$58 million.

It noted that the United States will lead the overall global market with projected revenues reaching almost US$1.3 billion, while the U.K, and the Middle East and Africa will see revenues hitting US$229 million and US$131 million, respectively.