Economics of Video over Frame Relay | TANDBERG D11624 specs

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Video on Frame Relay

10. Economics of Video over Frame Relay

The economics of video over frame relay are similar to those driving the use of voice over frame relay. Voice over frame relay is fairly well accepted as being economical when used in international applications. With international ISDN call prices frequently exceeding $1 per minute per line, the payback period for voice or video over frame relay, even with the higher international rates for frame relay, are dramatic.

Let us assume an international company with offices in New Jersey-USA, San Francisco-USA and London-UK. This company conducts a total of three hours of videoconferencing a week between these offices, at 384kbps. On ISDN, the non- discounted cost per month is $6,040. ($1,170 USA + $4,870 International)

In this instance, assuming the "worst case" for frame relay, the user purchases bandwidth for the exclusive use of video, the non-discounted cost (excluding access lines) is approximately $4,300 per month (based upon a 256Kbps CIR), a saving of $20,880 per annum.

Unfortunately, the above ‘video only’ example totally disregards the usual economies found in combining video with existing voice, data and fax applications on frame relay. In fact, a more realistic example would be a user who already has a 128 kbps frame relay link (with a CIR of 64kbps) for voice / data requirements.

This could then be upgraded to 512kbps (with a CIR of 384kbps). The incremental upgrade cost would then be approximately $2,000, thus the true monthly savings would be approximately $4,000 ($48,000 p.a).

A return on the investment will be realised in a matter of months.

D11624 rev.01