Cisco Expands Billion-Dollar Initiative in India

Cisco on Wednesday announced it is on course with its US$1.1 billion investment in India — and added it’s expanding its commitment there. The company expects to triple its workforce in India over the next three to five years.

Cisco first established operations in India in 1995 and today employs over 2,000 people in the country at its Global Research and Development center in Bangalore, as well as its sales offices in New Delhi, Mumbai, Bangalore, Chennai, Kolkatta, Pune, Hyderabad and Colombo, Sri Lanka.

“India is a very important market for Cisco’s global growth strategy,” said Cisco CEO John Chambers. “With the strong support of its government, India is committed to economic growth and development with a focus on building out broadband infrastructure, fostering a first-class educational system and creating a favorable environment for innovation and partnership.”

Long-Term Growth

Cisco is committed to its ongoing investment plan in India and its partnership with the Indian government, Chambers said. The company is putting its money where its corporate mouth is.

Cisco is investing $50 million for a new R&D campus in Bangalore that should open its doors by June 2007. It has also allocated more than $750 million towards R&D activities, training, and development in India over the next three years. In addition, Cisco will continue to expand its relationships with its strategic partners in India.

“India presents an opportunity in a market where Cisco hasn’t been heavily concentrated before, so there’s an obvious revenue stream there,” Yankee Group Analyst Zeus Kerravala told the E-Commerce Times from Hong Kong. “Because most of these underdeveloped countries don’t have much infrastructure, Cisco could have a lot of influence as to what services are rolled out and how they get deployed, which helps them articulate the company’s value proposition.”

The Digital Media Play

Cisco further proved its commitment to financing innovation in India by dedicating $100 million to venture capital investments in high-growth, early stage companies based there. In the last year, Cisco has invested $5 million in Indiagames and Bharti Telesoft and expects to invest another $25 million to $30 million over the next few months in companies involved in broadband content and digital media.

Cisco has also begun contributing products and services for rural connectivity and the development of a BSNL lab in Chennai, allocating $10 million toward these efforts.

“Up until now, we have focused on bringing more broadband services to the people who already have stuff,” Kerravala said. “Triple-play and HD channels bring more services to people that can afford them. One of the things we have to do is get connectivity to areas that don’t have it. That does require some investment and thought leadership — and a presence.”

Continued Expansion

Cisco continues to expand its presence in India. The company is enlarging its customer support operations there and plans to invest $100 million in growing its technical services capabilities, spare parts depots and channel development. It recently established a 24/7 premium spare parts depot in Chandigarh.

Cisco also announced plans to launch a manufacturing pilot facility in Chennai, whichwill initially manufacture certain products for the domestic Indian market. In line with the company’s outsourced manufacturing model, Cisco has selected one of its global manufacturing partners, Foxconn, to assist in developing the facility.

“Unlike the U.S., one of the advantages that emerging and underdeveloped countries have is that there are no legacy services in some of these countries, so you can just make that jump right away to some of the advanced services and bring more functionality to more devices,” Kerravala noted. “Some of these underdeveloped countries could take a leadership role in what the networks of the future look like and what user behavior looks like.”

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