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Rich Tehrani

This month High Priority features an interview with Kent Charugundla, CEO and president of Eagle Teleconferencing.Charugundla is a well-known telecommunications entrepreneur with diversified global experience in IP/telecom, conferencing, call centers,networking and outsourcing. As our readers are increasing their use of multimedia conferencing, including audio, video and Web conferencing services, this interview should be of extreme interest. Charugundla brings in-depth insights for the teleconferencing market, as well as practical recommendations.

 RT: What are your views on future of teleconferencing services?

KC: First, let me offer a broad perspective of the teleconferencing market, whose legacy is, remarkably, now over 50 years old.According to industry reports, the conferencing market is growing at a rapid rate and is expected to reach about $4 billion by the end of this year. North America accounts for about 70% of this exciting market. Industry revenue is growing about 10% per year and calling volume is growing over 20%. Our growth is above the industry norm and we are seeing a bright future for hosted multimedia teleconferencing services. We are continuously investing in building and expanding our global network infrastructure and the bridge capacity to meet growing market appetite. Eagle Teleconferencing employs a state-of-the-art communications infrastructure, with the use of all industry leading standards.

We do expect consolidation, as the economies of scale make a big difference in this highly competitive industry. As you know, Cisco recently bought WebEx to gain a leadership position in Web conferencing market. Large players such as AT&T and Verizon are outsourcing their teleconferencing services along with their own facilitybased services to meet global competitive pressures, while a few medium size companies such as ours, with years of strong marketing, business, global infrastructure, and operation experience, will continue to transfer billions of minutes of traffic over the global network, optimizing global skill-sets and cost-effective structure.

RT: How do you see multimedia conferencing shaping the overall teleconferencing market?

 KC: Multimedia conferencing revolutionizes everyday tasks such as management, business operation, training and communication among geographically dispersed teams. It increases productivity and reduces travel time and cost, while offering a personal mode of communication.

Internet technology now enables interactive, live sharing of audio, video and desktop applications during a conference session. Rich media data streams carry voice, video,and application data for end users to do things such as make conference calls, view live or streamed video, share application data with others, listen to voice mail or view video email, conduct instant messaging with colleagues, just to give a few examples. Multiple users participating from geographically distant locations can collaborate on applications and share visual information while they discuss a project together.

At this time, two parallel growth areas are occurring in the teleconferencing industry. Definitely, there is tremendous growth in Web conferencing and video conferencing, as its acceptance and cost effectiveness become more relevant. Simultaneously, there is significant growth for audio conferencing services. As Tom Friedman described economies of global competitive forces in his book, The World is Flat, the phenomena is spreading rapidly. Now a small business owner can think globally without any limitations, due to access to global communication tools. The globalization trend continues to be very promising for audio, video and Web conferencing, and we continue to be quite bullish about it. In brief, conferencing has now reached a stage of acceptability for small and medium size businesses globally.

 RT: What is your business model for the teleconferencing market?

 KC: Our business model is bottom-up. Let me explain what I mean. We want to migrate our end-users from audio to Webbased services to video conferencing. We are catering to small and medium size businesses with innovative pricing schemes, bundling, service levels, and service delivery so that these customers are delighted.

We have worked very hard to create a very simple business relationship with our thousands of customers so that they can use our teleconferencing platforms, follow the migration path, and grow as per their scalability needs in a cost-efficient manner. The way we deliver our services is using our global network infrastructure, automation of our business processes, and via telephone and Internet.

RT: How do you see IP communications and wireless communications evolving within your teleconferencing infrastructure?

 KC: Historically, teleconferencing is an outcome of basic telephone services, and consequently, the legacy network infrastructure is based on the time-division multiplexing technology. During last 10 years, we have evolved our infrastructure to support both IP communications and wireless communications. Our audio bridging network handles any originating or terminating traffic, whether it is landline phone or IP phone or wireless phone, anywhere in the world, at any time. We also offer Web-based services as well as Web conferencing services. Eagle Teleconferencing uses pure IP for all inbound and outbound network connectivity. As discussed earlier, we do not position ourselves as a technology leader, but we are a strong market-driven leader. We analyze the needs of the mass market, and develop a market driven application to meet competitive prices and high quality requirements of our prospective and existing customers. At this time, video conferencing is still at its infancy and technology companies have yet to invent low cost, low maintenance hardware for mass market. Within next few years, we will expand our business model of video conferencing and move aggressively into the video market.

RT: You manage a wide range of telecom services and diversified user groups. Where do you see significant growth for teleconferencing?

KC: We are witnessing significant teleconferencing growth in the U.S. market due to Internet and wireless communications. Today, revenue from audio conferencing segment is the highest, as millions of audio teleconferencing calls are made worldwide daily. According to Frost & Sullivan1s U.S. Audio Conferencing Services Market report, total traffic volume is expected to reach 35billion minutes in 2010. With our teleconferencing grid type network infrastructure, we have capacity to handle over 10 billion minutes annually.

We believe that IP infrastructure transformation will continue to evolve and replace the legacy TDM system within next 10 years. As billions of dollars have been already invested in legacy voice communications infrastructure, the IP replacement will happen gradually to be justified economically. In summary, teleconferencing will continue to be a healthy traditional service market.

RT: You have a global operation and you’ve recently been focusing on India. What makes the Indian market attractive?

 KC: We see the potential for large growth for teleconferencing in developing markets such as India, where we have a strong presence. The growth in India last year was 109%. We are using our India facility for our global back-office support to take the labor cost advantage. India produces about two million college graduates every year, one of the largest supplies of graduates in world. A number of highly competent Indian enterprises have established excellent integrated on-site/off-shore business models optimizing skill sets, operating efficiency, Quality of Service, and superb global delivery systems. This is the market segmentation which we are focusing on in India.

India has the advantage of a late start, as they are able to invest in the most advanced network infrastructure. It is home to two largest fiber optics companies in the world: Reliance (FLAG) and VSNL (Tyco & Teleglobe). There are advantages for India having these two, in that they offer competitive pricing and advanced network infrastructure. Reliance and VSNL have already fibered most of India, including small villages, thus preparing the country for the global market. This helps us to extend our market reach to the second and third tier cities.

RT: What is the effect of social networks on teleconferencing?

 KC: Online social networks, such as MySpace, Friendster and LinkedIn, are helping individuals develop personal and professional relationships more than ever before. Traditionally the real value of online communities in business is that you can bring people together online and add layers of connectivity such as teleconferencing for multiparty events.

Business teleconferencing is on the rise, opening channels of communication for businesses with more efficiency than ever. Today, companies are utilizing telephone and Web conferencing as new ways to drive results and boost bottom-line revenue. Social networks have replaced the more traditional boundaries. Today globalization suggests a broader, more complex relationship between global societies than was evident prior to the end of the Cold War and the emergence of the World Wide Web/Internet to communicate and disseminate information.

As a consequence of the profound social, political, and cultural transformations that have occurred since, it is critical to incorporateuse of the broad array of all electronic resources. For better or worse, the social network world is here to stay and that global society is being divided into two groups: “communication rich” and “communication poor.”

RT: How does teleconferencing help businesses increase productivity?

 KC: Our ConferenceLine service is a powerful productivity tool, as business objectives can be achieved without a face-to-face meeting. Telephone conferencing cuts business costs, saves time (and, as we all know, time is money) and saves cash flow that can be used for higher business priorities. It makes good business sense to spend your money wisely when it comes to daily, weekly, monthly, quarterly or annual business telephone conferencing. Mobility is now an integral part of business and using communications intelligently is a necessity.

ConferenceLine is a solid personal productivity tool to do business. In today’s competitive business environments, organizations around the world are looking for new and innovative ways to get the most of their meetings. We make it easier and far more cost effective to collaborate with co-workers, partners, and customers locally and globally. It should be noted that ConferenceLine is an enhancement to business communications, not replacement.

RT: Where do you see competition in the service provider market?

 KC: Facility-based conference line services can be divided into three segments: audio, Web and video. This represents over
$4 billion in global revenue among large, medium, and small service providers using TDM-based and IP based platforms.
AT&T, Verizon, Genesys, InterCall, Premiere and WebEx dominate the tier 1 market. We have also seen strong competition
in our European and Asian markets. The cost of conference line services will continue to drop.

Our strategy is a bit different and we strongly believe in extracting business values from economies of scale using global network infrastructure and global human resources, and offering the most competitive prices in the market place. Specifically, we believe that audio portion of conference line services is now a commodity and the cost of conferencing will continue to drop as new IP based bridging equipment players provide competitive solutions. For facility-based service providers for whose annual
volume is less than one billion minutes, it will be extremely difficult to survive long-term.

We have global operations, network assets, and talents dispersed globally. We are investing heavily into Europe and Asian markets. We see that the U.S. will be leading the world in innovation, but deployment of network assets, skills and
network operation will be continuously evaluated globally to extract maximum financial benefits.

(News - Alert) www.oaisys.com/talkument/.


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