Cisco to Set Up Center in India

The Associated Press
Wednesday, December 6, 2006; 11:41 AM

NEW DELHI -- Network equipment maker Cisco Systems Inc. will set up a center in India to support all aspects of its worldwide operations, the company's chief executive said Wednesday.

CEO John Chambers also said Cisco's $1.1 billion India investment plan, announced in October last year, is on course and the company plans to launch a pilot manufacturing project in the South Asian country by March next year.

The latest moves, including a plan to triple its work force in India to 6,000 employees over the next three to five years, will help Cisco sustain the momentum of its business not just in India but in markets worldwide, Chambers told reporters.

"Every move we are making here is with a global approach ... in no country in the world have we ever made this kind of a commitment," Chambers said after a meeting with India's Communications and Information Technology Minister Dayanidhi Maran.

Support work at the proposed Globalization Center in Bangalore, India's technology hub, will not be limited to products and services, but will cut across everything that the company does and offers to its customers, he said.

The company already operates a research and development center in Bangalore.

Wim Elfrink, currently a senior vice president of customer advocacy at Cisco, will head the new center as Chief Globalization Officer.

"Cisco chose India ... because India has a highly skilled work force, supportive government, innovative customers and world-class partners that already have global capabilities," Chambers said.

Scores of western companies routinely transfer software development and backoffice work to India, where wages are low and skilled workers are available.

Besides being a destination for outsourcing, India is also a lucrative market for Cisco.

India's booming economy and rising middle-class incomes are driving the growth of the communications and technology sectors at one of the fastest rates in the world.

Cisco's revenues from India totaled about $750 million last year, averaging an annual growth of more than 30 percent.

Chambers said he expects India's share in Cisco's global sales to rise to 5 percent in three to five years. "India is a very important market for Cisco's global growth strategy."

In order to boost domestic sales, the company plans to manufacture several products here, starting with a pilot project in the southern Indian city of Chennai by March next year.

The pilot project will produce Voice over Internet Protocol phones, which abandon traditional copper wires and use the Internet for communication. The project will be operated by Taiwan-based Foxconn Technology Group.

Cisco does not directly manufacture its products. Instead, it hires companies like Foxconn and Celestica of Canada to set up dedicated manufacturing facilities.

© 2006 The Associated Press