AT&T will soon become the first major telecom operator to launch a managed telepresence service, teaming with Cisco Systems to enable a wider range of businesses to do high-end video conferencing by eliminating the major upfront capital expense and enabling users to connect in the network with other subscribers.

The AT&T Telepresence Solution is already in trials and is expected to be available in 23 countries by the second half of 2008, with additional availability in 2009. Telepresence is high-end videoconferencing that makes video meetings much more realistic, enabling them to replace face-to-face meetings. Cisco has been selling its telepresence gear for more than a year, and has more than 500 on order, mostly from larger enterprises that connect the sites over dedicated links.

Analysts have predicted that telepresence would be a natural fit as a managed service.

The network-based service opens up the telepresence market to smaller businesses, said Dale McHenry, AT&T's vice president for enterprise data networks.

“This is the first fully managed Cisco telepresence service and the first announcement of inter-company capability for telepresence,” McHenry said. “It’s a pretty powerful communications tool. It you look at telepresence arrangements – the room conditions, the sophisticated network dimensions, the highly dispersed geographies, there is a lot of stuff to maintain. Having us project-manage this, making it intuitively simple, with one-call help functions and one simple monthly invoice, will make it more appealing to a much broader range of customers.”

The cost of the equipment, which can be up to $300,000 for a high-end, three-screen system, can be amortized over the lifecycle of service, lowering the initial barrier, McHenry said.

Cisco has orders for 500 telepresence systems in addition to the 200 it has deployed internally, and most of those are at “more sophisticated and distributed multinationals,” said Chris Coles, vice president and general manager of Cisco's telepresence operation. “When you look at our footprint, we are on five continents. But as we move off the Fortune 100 to 500 and into segments below that, what you’ve got are customers who have similar needs to coordinate multi-locations, trading partners, customers, suppliers – AT&T bundles that together with managing the service, and more of those companies will be able to use it. As form factors evolve and as bandwidth efficiencies are achieved, we are going to see a whole array of endpoint designs and feature functionality that appeal to a wide spectrum of businesses out there.”

Typically, Cisco would sell a three-screen or one-screen system, along with a Cisco Call Manager for session initiation protocol capabilities and other gear.

“Under the AT&T offer, we are looking to move some of that back-end capability into the AT&T network, thus liberating the enterprise from some of that complexity,” Coles said.

According to McHenry, AT&T will install the telepresence gear and an AT&T virtual private network connection into its network, as well some capability in the network to support the “meet-me” service and Web-based portals for reservations and scheduling to connect over groupware. AT&T will then manage the service lifecycle, McHenry said.

AT&T will also develop industry-specific applications for key vertical segments including health care, high-tech, retail and government, to enable them to reduce travel costs and improve productivity, McHenry said.