Datacraft ,VTEL in Asia distribution deal
Tuesday February 17, 12:05 am Eastern Time
By Josephine Ng
SINGAPORE, Feb 17 (Reuters) - Singapore's Datacraft Asia Ltd has agreed to market and sell U.S.-based VTEL Corporation's (VTEL - news) full range of video-conferencing systems in the Asia Pacific region, the two companies said on Tuesday.
Datacraft will sell VTEL's products, ranging from desktop to large boardroom video conferencing systems, in 11 countries.
VTEL chief operating officer Jerry Benson Jr told reporters in a video conference from Austin, Texas, the deal was part of an aggressive plan to increase its international sales.
''Today, less than 25 percent of VTEL's business comes from outside the U.S.. We intend for that number to grow to 40 percent. The only way to do this is to be very aggressive in the principal markets in Asia and Europe,'' Benson said.
VTEL aimed to become a US$1.0 billion company by 2001, he added.
For the fiscal year ended July 31, 1997, VTEL recorded sales of US$191 million.
The Asia Pacific now contributed about nine percent to VTEL's global revenues, Benson said.
He indicated that VTEL, which now makes its systems in the United States, was looking to manufacture, assemble and provide services for its products in Asia and Europe in future.
''We will begin to see the formation of such capabilities a year from now. What scope is hard to say, but we will be able to have basic assembly, service and support in Europe and Asia,'' he said.
Benson said investment would be in "multi-million dollars."
VTEL vice president for international sales Frank Kaplan said the company had a worldwide market share of 23 to 25 percent.
Its merger with Compression Labs last year had given VTEL a strong presence in China, helping its share in the Asia Pacific to reach 30 to 35 percent so far, Kaplan said.
Datacraft chief operating officer Ron Cattell said the company was looking for sales of US$30-40 million from VTEL's systems over a three-year period.
Datacraft would provide network applications on top of its main business of building telecommunication networks, he said.
The partnership with VTEL would start to contribute to Datacraft's earnings from the fiscal year starting in July 1998, Cattell said.
Key to the growing demand for video conferencing in the Asia Pacific was the reduction in ISDN (Integrated Services Digital Network) rates, he said.
They have fallen to levels similar to international dialling rates or within 20 percent higher, he said.
The global market for video conferencing is estimated to hit US$5.0 billion by 2000, according to research firm Dataquest.
Industry estimates projected that by that time, the video conferencing market would be worth US$1.0 billion, Cattell said.
He said that despite economic problems in Indonesia and Thailand, those markets continued to be profitable for Datacraft.
Indonesia and Thailand each made up less than four percent of Datacraft's business, he added, with some 51 percent from China, Hong Kong and Taiwan.
He said demand from video conferencing in the region would come from companies with international operations and from China due to its size.
Video conferencing opened up interest in areas like distance learning and telemedicine, Cattell said.
''We see already in China a lot of interest for some of the more innovative applications for video conferencing,'' he said |
