Irvine Firm Sets Stage for Video Conferences : Office Telephone Management not only sells the equipment, it leases out its facility to companies for such calls.

IRVINE — The budget was set for Taco Bell Inc. to purchase video conferencing equipment when a corporate jet--carrying its president and five top executives--developed trouble with its landing gear.

While the January episode ended with a safe landing, it underscored to Taco Bell executives the urgency of buying the equipment to reduce business travel. Managers at the Irvine fast-food company visited Office Telephone Management in Santa Ana a few weeks ago to catch a glimpse of what their future communication system could do.

For years, travel has been an integral part of the corporate lifestyle. But if Andrew R. Horowitz and Charles F. Merino of Office Telephone Management can help it, executives in Orange County will stay home and, instead, use their video conferencing center.

Office Telephone Management in Irvine began to sell the equipment and lease out its video conferencing facility in November to companies that either could not afford or did not want to invest in the equipment, which retails for $85,000.

The video conferencing network consists of two large color televisions, a graphics camera, an audio system and an electronic pad for sending sketches and other written information. The company has an agreement with U.S. Sprint that helps it link with hundreds of video conferencing centers around the nation and overseas.

“We knew there was a demand for this leasing service because we saw a major increase in sales of the equipment,” said Horowitz, company president.

The cost for a video conference between Irvine and New York City is about $750 an hour and one between Irvine and Tokyo would cost about $2,000, said Charles F. Merino, manager of the company’s video conferencing center.

The video conference industry has grown tremendously in the last four years. According to the International Teleconferencing Assn., the industry grew from $122 million in 1988 to $299 million in 1990, the latest figure available. The Washington-based trade group said its industry is expected to post annual sales of $429 million for 1991, despite the recession.

The idea of video telephone services has been around for 30 years, said Stephen L. Hiscott, manager of association services. But it did not catch on until the late 1980s when the cost of equipment dropped, making such systems affordable for many companies, he said.

“People also realize that it is more effective to get their message through when they see a person up on a screen rather than just telling them over the telephone,” he said.

Some companies have determined that video conferences can significantly cut their travel costs, which makes the leasing prices cost-effective.

Mission Power Engineering Co., an Irvine developer of independent power facilities, saw the value of video conferencing and plans to use Horowitz’s video conference center for future meetings with its executives around the world.

“We’ve looked at comparable travel costs and employee productivity and we found that for us to send someone to, say, take a 17-hour flight to Australia and back means those 17 hours in transit is not productive,” said Gerald G. Lyman, Mission Power Engineering’s manager of cogeneration ventures.

“Using the video conferencing center (for a conference between Australia and California) cost about $2,000 an hour,” said Lyman, which compares with $5,000 for air fare and accommodations. “So, it may seem expensive per hour but it’s worth it for certain types of meetings that does not require our physical presence.”

Office Telephone Management was established in 1983 and is better known among commercial real estate companies for providing tenants of commercial buildings with telecommunication services. The company installs and maintains telephone systems and billings for several buildings owned by Birtcher Development Co. in Laguna Niguel and the Wolff Co. in Irvine.

By providing video conferencing services, Horowitz hopes to increase his company’s revenue from $2.5 million in 1991 to about $3 million this year.

As the service becomes more popular, Merino said he hopes to add a conferencing center in San Diego. And if enough business is generated, Horowitz plans to spin off the video conferencing centers under a separate company that Merino would manage.