We calculated the cost of an established tele-ophthalmology service, from a health-provider's perspective, and compared this with the cost of three other existing eye-care service delivery options. During a 12-month study period, 118 persons took part in the tele-ophthalmology consultations between a rural clinic located approximately 900 km from the Lions Eye Institute in Perth. The variable costs of tele-ophthalmology were 166.89 dollars(Australian dollars) per patient, and the alternatives cost 445.96 dollars, 271.48 dollars and 665.44 dollars per patient. Tele-ophthalmology incurred a set-up cost of 13,340 dollars. The threshold at which tele-ophthalmology became cheaper than any of the alternative options occurred at a workload of 128 patients. Tele-ophthalmology offers a viable alternative to conventional eye-care service in rural and remote areas.