Videoconference Industry Booms

LENIN and Stalin would probably be dismayed! First American fast food, such as McDonald's, arrived in Moscow. And now, the global teleconference - an increasingly popular communication's practice in the industrial West - is being beamed right into the very heartland of the Soviet Union, thanks to a bastion of the American capitalist system, American Telephone & Telegraph Co. Teleconferencing is the use of audio and video hookups between participants in different locations. The teleconferencing industry has been in the fast lane since the early 1980s, when its international market began to open up. Total industry revenues in 1984 were slightly under $250 million. Combined revenues are expected to reach $1 billion this year, up from $814 million last year, according to the International Teleconferencing Association.

Although audio conferences make up the biggest segment of total revenues, two-way videoconferencing is the fastest growing segment of the industry's business.

Last Friday, AT&T introduced the first operational international videoconferencing service between the United States and Soviet Union. Soviet communications officials talked with executives from AT&T using a crystal-clear video hookup between Moscow and New York. The videoconference represents ``an important new communications alternative'' to actually traveling the 4,700 mile distance between the two cities, says S.R. Willcoxon, the president of AT&T's international group.

This opportunity comes at a propitious moment for the Soviets. Moscow is expected to overhaul its investment laws soon to allow foreign ownership of companies within the Soviet Union.

AT&T is one of scores of companies involved in the international or domestic North American teleconferencing industry. Many of them are relatively unknown to the general public. MCI Communications Corporation and US Sprint, AT&T's main North American competitors in the long-distance telephone market, are also active in teleconferencing, and are expected to follow through with their own video hookups to the Soviet Union. In the case of the Soviet Union, however, AT&T has become the first company legally tariffed for international videoconferencing.

``We think the [global] market for videoconferencing will be very big,'' says Atma Ram, international group product manager for AT&T. ``Growth for the industry is already running at over 20 percent a year and we think it could go as high as 25 percent annually,'' Mr. Ram says. Part of the reason, he says, involves declining transmission costs. A few years ago, he says, costs were based on hourly usage. Currently, rates are based on half-hour usage. Eventually, says Ram, rates will drop to smaller time segments, such as quarter-hour.

Depending on the time of day, or availability of transmission channels, it is now possible to have a one-hour hookup between New York and London that costs around $1,800. To actually send a delegation of executives in either direction, such as from New York to London, for example, could cost as much as that, if not far more, when air travel, ground transport, dining, and hotel room costs are factored in, Ram notes.

US companies such as AT&T use foreign carriers for their international link. In the case of the Soviet Union, AT&T links up with the Ministry of Posts and Telecommunications, a state agency. The cost for a one-hour New York to Moscow videoconference will be around $3,200. That includes both room charges (since participants on both sides of the Atlantic must be in rooms with television cameras and video screens) and transmission costs.

AT&T has videoconferencing services available in 18 nations. Frequent users of audio or videoconferencing include fashion, finance, and automobiles.

Audio and videoconferences, says Ram, are entirely confidential - that is, signals are encoded so that only the parties involved can capture and process the transmissions.