Video Conferencing Firms See Boost From European Snow Chaos
03 December 2010 - 10:01PM
Dow Jones News
Video conferencing companies are seeing increased demand for
their services due to the chaos caused by the current spell of icy
conditions across most of Europe, adding to the boost they received
from travel disruptions earlier this year as a result of the
Icelandic volcanic ash cloud.
Due to the cold snowy weather hitting the continent over the
past week, several European airports have been forced to cancel
flights while some, including the UK's Gatwick, were forced to
close down completely.
But companies which offer business travellers an alternative to
physical meetings expect these disruptions to bring them more
customers.
Regus PLC (RGU.LN), which operates a network of business
lounges, has opened its doors to snowbound travellers in the U.K.
and some countries on the continent, where they can use facilities
like the Internet for free and also book video conferences, press
spokesman Henry Collinge told Dow Jones Newswires.
Regus, which uses video conferencing gear from U.S.-based
Polycom Inc. (PLCM), has seen a 40% to 50% increase in video
communication since the volcanic eruption in Iceland which grounded
much of Europe's air fleet during April and May this year, said
Collinge.
Video conferencing demand should get a boost from the recent
travel disruptions, he said, because when people are forced to try
out alternatives to physical meetings, they realize that virtual
conferences are a viable option.
In addition to the harsh weather conditions, European air
transport has been further hit by a strike at Finnish airliner
Finnair Oyj (FIA1S.HE), and as a result Danish telecom operator TDC
A/S (TDC.KO) is offering free video conferencing for stranded
travellers in the Nordics.
The ongoing strike and weather chaos show how sensitive
communication-dependent companies are to disruptions, and thus
offer TDC a good opportunity to showcase its virtual meeting
services, said TDC Sweden's head of videoconferencing sales, Lars
Schon.
Companies have typically used video conferences instead of
physical meetings to save money, but incidents like the recent
disruptions and the volcano ash cloud have also highlighted their
use in reducing vulnerability, he added.
Video conferencing is growing rapidly with the global market
expected to jump to around $8.6 billion in 2013 from around $4.9
billion this year, according to research firm Gartner.
To take advantage of this growth trend, U.S.-based IT company
Cisco Systems Inc. (CSCO) earlier this year completed its $3.3
billion takeover of Norwegian video conferencing gear maker
Tandberg, which delivers equipment to service providers including
TDC.
Still, while the video conferencing market is growing rapidly,
extraordinary events like snow storms and volcano eruptions don't
tend to give much of an instant sales boost, said Gartner research
vice president Scott Morrison.
However, he said, severe disruptions make businesses more
interested in alternatives to travel, and some of that interest
will translate into higher long-term demand.
People are more likely to communicate through video conferencing
when there are others who also use the services, so the current
strong demand could well create a virtuous circle for the market,
Morrison added.
By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099;
gustav.sandstrom@dowjones.com
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