MCI Bids for Slice of Video Conference Market : Telecommunications: The No. 2 long-distance carrier is expected to announce today that it is teaming with PictureTel Corp. in the venture.
After watching rival long-distance carriers dominate the fast-growing video conferencing market, MCI Communications Corp. is finally jumping into the business.
The nation’s No. 2 long-distance carrier is expected to announce today that it will begin offering video conferencing communications service to be used with equipment manufactured by PictureTel Corp., a Peabody, Mass.-based firm that is one of the nation’s two largest makers of video conferencing devices.
The alliance, analysts said, should help the fortunes of both companies, as well as spur continued growth of video conferencing, about a $500-million annual worldwide business.
Video conferencing takes a routine telephone call a step further by allowing participants--either individuals or large groups--to see one another as they talk. It is also used to display work in progress for comments from far-flung colleagues and clients.
The video conferencing business got a tremendous boost earlier this year when it was used as a substitute for airline travel interrupted by the outbreak of the Gulf War. Although the end of the war reduced some reliance on video conferencing, usage remains higher than before the war because equipment prices have continued to drop, analysts say.
“It makes sense for a long-distance carrier to get involved in the market,” said Elliot Gold of Telespan, an Altadena-based telecommunications market research firm. “The only question is why MCI has waited this long to enter.”
US Sprint, the nation’s No. 3 long-distance carrier, currently has the largest single share of the video conferencing market, with American Telephone & Telegraph close behind. Both Sprint and AT&T; operate video conferencing centers as well as sell equipment to businesses.
MCI and PictureTel said they intend to go after business and government customers with PictureTel’s Systen 4000 equipment and MCI’s long-distance services.
