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Tandberg Video on Frame Relay
D11624 rev.01 13
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.