Implementation Guides

How Much Does It Cost?

PCQ Bureau

14 Mar 2002 10:22 IST

New Update

There are some fixed costs that have to be incurred in a video-conferencing setup, which will vary depending upon the type of setup. You need to spend on hardware and acquiring the necessary bandwidth. Then there are the variable costs such as consultancy charges you would pay to the vendor for implementing a customized solution.

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Hardware

You can hold a passable video conference using two webcams connected over a dial-up link. However, webcams can’t give you the quality you’d need to hold a live business meeting involving important strategic decisions. For this, you’d need special end-stations for video conferencing, which consist of good quality video cameras and microphone. End-stations come in two flavors–those that connect to your PC and set-top box types that can directly connect to an ISDN line. The latter usually connect to a TV to display the video, and use its speakers for the audio. A good PC end-station can cost you anything above Rs 50,000, while a set-top box version can cost a few lakh rupees. You need a pair of either for holding a single video-conferencing session, meaning double this cost. The set-top box version is more expensive because of the additional features it offers. For instance, some of them have voice-sensitive cameras, which automatically move and focus on the person who’s talking. This is useful in a video-conferencing session where multiple people are sitting around a table. Some end-stations even let you set preset locations to which the camera should move.

How much do you save

A video-conferencing solution can be as inexpensive and simple as setting up two webcams over a dial-up or ISDN link. Or it can be as complex and high-tech as setting up an MCU to enable people sitting in many different locations to have an audio/visual meeting with each other. The fact is that video conferencing is here, and is not very difficult to implement. But what about costs and benefits?

The cost savers

Video conferencing can be cost effective for companies who have significant travel needs for inter-office meetings. This can be best understood with an example. Suppose you have offices in Delhi and Mumbai, and one of your executives has to fly from Delhi to Mumbai for a two-hour meeting. The minimum cost for this will be the taxi fare between the airport, home and office, the airfare and cost of meals. The cost of accommodation gets added if he has to spend a night in Mumbai. Now, these costs will vary significantly depending upon how senior the staff member is. (If your MD were traveling, then he may fly in the premium class and stay in a 5-star hotel). The minimum cost, in financial terms, would be around Rs 10,000 to start off. You will also lose out on the opportunity front, as the entire day will be spent for a short meeting. For a large company, many people will need to make similar trips, so the costs will multiply. If five people travel per month, the cost will be about Rs 50,000 a month, and Rs 6 lakh a year. The cost of video-conferencing equipment between two locations will also be around this figure. So, in this case the cost of a video-conferencing setup can be recovered in one year. Even for companies whose employees travel less frequently by train, video conferencing results in big-time savings, especially for long-distance travel.

A single pair of end-stations is useful for having a point-to-point video conferencing between two people. If you want to add a third person to the conference, you need an MCU (Multi conferencing unit). Some end-stations come with a built-in MCU, which can usually handle four to eight simultaneous sessions. If you want to hold more sessions, then you’ll need a larger MCU unit, which would basically be a stack of cards that fit into a cabinet. The cost of this MCU would depend upon the number of ports you buy in it.

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Other hardware costs include TVs at each point to receive the incoming video and audio if you use set-top box end-stations and other miscellaneous items.

You pay for

Hardware: PC-based cameras, set-top boxes, or multi-conferencing units, TV or projector
Bandwidth: 384 kbps ISDN is optimum. 128 kbps is workable
Service: Depends upon the complexity of your setup
Others: Meeting rooms, lighting controls, training

Bandwidth

The next significant cost in implementing a video-conferencing solution is the bandwidth. Video conferencing requires at least 128 kbps ISDN for a workable session. With this bandwidth, you can theoretically attain a frame rate of around 15 fps. But if you use a 128 kbps ISDN connection, then this frame rate will be lower because of losses in the connection. It can go down to about 12 to 13 fps. So, the optimum bandwidth for a good video-conferencing session works out to be 384 kbps. Translating this to ISDN terms, you need three BRI (Basic Rate Interface) connections, or three 128 kbps lines. So the costs involved here would be the initial investment for the ISDN connection, and recurring costs for the calls you make on it. Call charges would be the regular

STD/ISD tariffs.

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Other charges

These will vary depending upon the level of customization and complexity of the video-conferencing network you setup.

The frills

The cost heads under this can be considered frills by some companies and essential by others. These can include having a separate meeting room dedicated for video conferencing, special light controls, multiple microphones, etc. A meeting room has to be designed keeping in mind how video conferencing would take place. Plus, as video conferencing is similar to using a video camera for creating movies, you have to take care of the lighting. You could also include a large LCD projector, instead of a TV if there are many attendees. Training on how to use the video-conferencing system is another important aspect. It’s not just about how to operate the equipment, but the manner in which to hold a conference, the kind of clothes that would be more visible, movement in front of a camera, etc.

Anil Chopra

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