Away on business: Talk is cheaper
Thu June 5, 2003 02:30 PM ET
By Michael Conlon

CHICAGO, June 5 (Reuters) - The spotlight these days is often on video conferencing as a substitute for business travel. But the real news is that plain old telephone voice conferencing is stealing the show.

Major companies in the field say the troubled economy, which has slashed travel budgets and continues to cause uncertainty, is the main reason for grabbing the phone instead of the plane. Threats of terrorism, war and general international turmoil, plus the recent SARS health problem, have added to the chill affecting travel routines.

MCI, which bills itself as the world's largest provider of conferencing services, says the number of calls in conferences has been growing about 40 percent a year for the last several years.

"Audio is still the lion's share of the market, even though video has recognition and Web conferencing is fast growing. It probably represents 80 to 85 percent of (conferencing) revenue," says Neal Lulofs, MCI's senior manager of conferencing marketing.

"Audio is the workhorse. It is the way people are conducting business and they are enhancing it with Web conferencing. The trend is continuing broadly," he added.

Surveys conducted by The National Business Travel Association in the last few years also document the growth of conferencing, both voice and other.

"Where travel managers might have sent five people to a meeting they now send three and conference in the other two," said Allison Marble, spokeswoman for the group. "It's all about meeting the bottom line and business objectives."

Swapping talk for travel appears to have staying power.

"These trends have been in place for several years, not just a couple of years or months," Lulofs said. "We certainly don't feel that people won't have to meet face-to-face again. Everyone recognizes that a face-to-face meeting will be more effective.

"But the question is: How you can incorporate conferencing, when meeting with a new client, beyond that and after that to maintain the relationship," he added.

Randy Salisbury, chief marketing officer for Premiere Conferencing Inc. also believes there is an organic change.

"I would argue that a rising tide lifts all ships," he said. "Habits change. The longer you use an alternative to what you used to have, the more you become accustomed to it. Clearly there's a spike right now in volume and activity.

"The growth will slow as the economy improves, but I think it will stay at a higher level for us because we're demonstrating an alternative way of doing business," he added.

Premiere, a subsidiary of Ptek Holdings, operates in 11 countries in North America, Europe and Asia.

In addition to the growth already under way, Salisbury said, the illness threat posed by SARS "Has had a tremendous impact on our daily volume" in the Asia-Pacific region, he said.

Travel restrictions and corporate travel bans to areas heavily impacted by the disease are causing a huge increase in voice conference calls, he said.

AT&T spokesman Mike Cuno says that company's audio conferencing has been growing by about 20 percent a year, with a 30 percent jump in the first quarter of this year compared with the same period a year earlier.

"The biggest growth we're seeing is in reservationless service. You can go onto our Web site and receive a dial-in number and password to use as host or conferee. Once you have that, you can schedule conferences without going through an operator -- as often as you want for as long as you want," he said.

That approach has grown to represent 60 percent of AT&T's total conferencing business over the past few years, he added.

Another growing area, he said, is the use of Web conference for PowerPoint and similar presentations in conjunction with an audio conference.

Cuno adds that beyond corporate travel cutbacks, another factor spurring audio conference growth is the convenience it affords in a time when everyone is stretched for time.

As of the end of May, he said, AT&T has broken and set new daily conferencing usage highs a total of five times since the year began.

Zeus Kerravala, a vice president for Boston-based Yankee Group communications consultants, says the growth in voice conferencing has been in the 30 to 40 percent range, but he believes some of it would have occurred regardless of outside forces because "people are collaborating more," relying more on direct communication to get things done.

Voice remains by far the biggest segment in the teleconferencing market, he added.