Cisco to make IP phones in Chennai

NEW DELHI: Networking major Cisco Systems Inc. today 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.

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