As more and more companies resort to the virtual medium to reduce their travel spends, companies like BT Conferencing stand to gain a lot. However, Aaron McCormack, CEO, BT Conferencing in an interaction with Surabhi Agarwal says that the gain balances itself out from the loss of business due to delayed investments. But, he hopes the next growth wave to come from Asia as it expects to double its Asia revenues in the next one year driven by the Indian and the Japanese market. Excerpts:

The global economic crisis led many companies to cut on their travel costs. What kind of opportunities did that create for conferencing?

Firstly, all of us wish that there was no downturn. Even if it is good for certain companies, the human costs of downturns are so high. There are some 100 odd million people unemployed across all countries, which is terrible. In terms of India, there is very little challenge to the domestic economy. Your banking system has been kept very stable and you tend to be growing. In conferencing, it has been mixed. Obviously with people wanting to cuts costs they are using alternatives to travel. That is happening for sure. But on the counter side, when people are unemployed they don?t use a lot of conferencing. If you have customers that have laid off a significant number of people, then most of their conferencing needs to come down. Other thing is that you get a lot of cost pressure. There is a lot of demand from customers to maximise their contracts and get the best price. So those two things pretty much balance each other out.

We almost have a potential of a swine flue epidemic that will see a lot of people preparing for new ways of doing business that will work through the pandemic. Working through more virtual mediums and making sure everybody knows how to use a Web or a audio or a video conferencing solution so that they are prepared for the time when their office has to be shut down or their sales people are not allowed to travel.

How does the balance between new business and loss of business fare?

It is pretty much equal, with the exception of Asia. This is because Asia is managing through the downturn much more elegantly than the West and also there has been a stronger build up in trade maybe inside the region, maybe faster than other regions. Inside Asia, the conferencing market is very buoyant and we are going to double the size of our conferencing business in Asia in one year?s time. I can?t talk about concrete numbers but it is a substantial market and we are going to double it.

How much does Asia contribute to your overall revenues?

Asian business is around 6% of the total global revenues and 50% comes from the United States and 44% from Europe. And we expect the proportion of Asian revenues to grow 2-3 points every year. What that means is that we are growing much faster here than we are growing in other markets. I was saying that markets are flat in other geographies but BT is still growing in these geographies. We are growing very quickly at BT Conferencing; we are growing at more than 20% for the last three years. We are able to grow our video conferencing business at more than 10%, where video market is growing at less than 5%. And we are already the leader in the video market. So it is great to be number one in the market and still grow much faster than the market.

How is India performing for BT Conferencing?

India is growing strongly on the basis of two major dynamics. Firstly, global companies are growing strongly the use of conferencing between Indian companies. Indian companies are also buying quite strongly. So we have been able to pick up contracts not only for global business but Indian companies as well.

What are your expectations from India in the medium and long term?

In the next 5-10 years, for us India revenue will be in tens of million dollars. How much does India contribute as a percentage share of our global business, will depend on how quickly we grow in other markets. You will see a lot of the revenues turn up in other regions. So if we supply global audio conferencing to Fidelity, we bill them in Boston and all their Indian users also get billed there. We have some international clients who we bill in India but it?s a small proportion.

I expect that value generated from India to be substantial. It is one of the two focused countries for us in the region along with Japan.

You didn?t say China?

That is because the structure of the Chinese conferencing industry is not suitable for us to make investments there. Basically, licenses are difficult to get. There is a limited number which is given to domestic Chinese companies, they have no need of our knowhow and technology as they have their own. Here in India and also Japan, we have a very strong BT heritage and reputation. We have been in India for a long time and there is a good reputation we carry. We have thousands of employees and we export around 2% of the total exports of the IT and BPO services from India. So we have a long track record in India. Opportunities are in the deregulation of the telecom market. We would like to see more openness but certainly there has been a lot of progress.

Which markets does BT expect highest growth rates?

India and Japan will be extra suitable as they are right for BT and the market itself is under-penetrated.

Is there a different dynamics in the market here?

It is no different from most other markets. Major difference lies in the change of consumer behaviour.

We are making more and more investment in helping the end user in terms of adoption and training. The difference between an Indian consumer and one in America is that technology is common place for a longer time so the penetration is more there. The 20% people in Europe or the US who should use the video conferencing solutions already use them. In India that figure is less than 10%, so in that sense there isahuge potential.