Cisco Systems to Invest Over US $1 Billion in India over Next Three Years

Investments in Research and Development, Leasing and Finance, Sales and Support and Venture Capital Highlight the Importance of the India Market

NEW DELHI, India and SAN JOSE, Calif., October 19, 2005 - Cisco Systems® today announced a major investment initiative in India totaling US $1.1 billion. This announcement highlights the growing importance of the Indian market in the global economy. The announcement was made by John Chambers, President and CEO of Cisco Systems, on the first day of his three-day visit to India.

Chambers discussed Cisco’s investment plans in India with the Honorable Prime Minister Dr. Manmohan Singh and the Honorable Minister of Communications and Information Technology, Shri Dayanidhi Maran, while in New Delhi today.

“Through the wisdom of its government leaders and the entrepreneurship of its private sector, India has rapidly risen to become a major force in the global economy,” said Chambers. “Cisco believes that the Internet, and related technologies, will be a key enabler for India to achieve its goal of becoming a developed nation. As Indian companies strive to be globally competitive, they have realized the importance of investing in information technology and networking to adapt quickly to rapidly shifting market transitions.” Chambers also added, “A year and a half ago, Cisco recognized this inflection point in the Indian market and made several strategic investments, which are paying off today. Cisco in India is truly a global success story.”

The Indian networking market has grown rapidly in the last few years, fueled by liberalization, market reforms and telecommunications deregulation. In order to better service the needs of Indian customers, eighteen months ago Cisco India formed five separate vertical business groups: IT Services, Enterprises, Service Providers, Government and Defense, and SOHO/Consumer.

Cisco’s three-year expansion plan in the country will direct investments in the following areas:

* US $750 million will be allocated to research and development (R&D) activities, including training, development and staffing over the next three years. Cisco’s own R&D activities will be complemented by work done by Indian strategic partner companies.
* US $150 million will be dedicated by Cisco Systems Capital - a division of Cisco Systems, Inc. - to provide leasing and other financial solutions to Cisco customers and partners.
* US $100 million in venture capital will be earmarked by Cisco to invest in Indian start up companies.
* US $100 million will be invested in customer support operations - a significant portion of which will be allocated for technical services, spare parts depots and channel development.

Cisco first established operations in India in 1995 and today employs over 1400 people in the country in its Global R&D center in Bangalore and offices in New Delhi, Mumbai, Bangalore, Chennai, Kolkatta, Pune, Hyderabad and Colombo, Sri Lanka.

The company also committed to expanding the Cisco Networking Academy Program in the country. There are currently 141 networking academies across 22 States and Union Territories in India and the program will be extended further within each State and Union Territory by 2006.

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