Cisco to make IP phones in Chennai   

NEW DELHI: Networking major Cisco Systems Inc. has announced the starting of
a manufacturing base in India along with moving in 20 per cent of its top
executives as a commitment to the country. 

Announcing this at a joint press conference with Union Communications and IT
Minister Dayanidhi Maran, Cisco Chairman and CEO john Chambers said that the
next stage of its Globalization strategy with the selection of India as the site
for its Globalization centre, called "Cisco Globalization Centre
East." 

In addition, the company also announced moving of 20 per cent of its global
top executives into India, starting with the appointment of Wim Elfrink as chief
globalization officer, who will also retain the position of senior vice
president of Customer Advocacy. He will be reporting to Chambers, and will
relocate to Bangalore, in January 2007. 

”We see India contributing to about five per cent of Cisco's global
revenues and in this strategy we chose India as the location from which to
expand its globalisation vision. India has a highly-skilled workforce,
supportive government, innovative customers and world-class partners that
already have global capabilities," Chambers said further. 

“As a major initiative,” the Cisco chairman said, “Cisco plans to
launch a manufacturing pilot facility in Chennai, which would manufacture IP
Phones, both for the domestic and overseas markets.” For this purpose, and in
line with Cisco's outsourced manufacturing model, the company has tied-up with
Foxconn, to work with the company on the facility. 

Elaborating on the investments of $1.1 billion in India, Chambers said that
the company would allocate $50 million for a new R&D campus in Bangalore, to
be operational by June 2007. “Another $ 750 million would go into R&D
activities, training and development in India over the next three years. We have
deployed nearly $50 million out of a $150 million fund to provide leasing and
other financial solutions to our customers and partners,” he said adding Cisco
Systems Capital recently earmarked another $10 million for near-term deployment. 

”The company also plans to invest in innovation in India by setting-up a
$100 million venture capital fund in high-growth, early stage companies based in
India. In the last year,” he said adding that Cisco had already invested $5
million in Indiagames and Bharti Telesoft and expects to invest another $25 to
$30 million over the next few months in companies involved in broadband content
and digital media. 

As part of the expansion of its customer support operations in India, Cisco
plans to invest $100 million in growing its technical services capabilities,
spare parts depots and channel development. Cisco recently established a 24x7
premium spare depot in Chandigarh. It has also committed $10 million for
products and services to be used for rural connectivity by the BSNL lab in
Chennai.

Talking on the occasion, Dayanidhi Maran said: "Cisco's growing
investments across all its operation areas in India is a vindication of the
increasingly self sustaining ecosystem that the country provides for businesses
to thrive and compete in a globalised economy. Additionally, Cisco is also
supporting initiatives aimed at using Information and Communication Technologies
to stimulate economic and social development. The use and application of ICT
remains the most powerful engine for economic growth." 

“Cisco's manufacturing pilot only proves that India has geared up for
taking up production of high-tech manufacturing capabilities,” Maran added.