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Vipin V. Nair

Mr Chugh says that the significance of the Indian market can be gauged from the fact that Cisco has set up a multi-million dollar logistics facility in Bangalore to stack up spares.

NEW DELHI, Feb. 23

ON every desk in Cisco Systems' Delhi office, there are two telephones: One to talk to the outside world and the other, to talk to Cisco offices though a hotline.

"Technically I can have only one phone for the purpose, but the law does not allow you to interconnect both the networks," says Mr Manoj Chugh, President, India and SAARC of the network equipment giant, ruing about the additional investment he has had to make.

Another concern for him is the high levels of duties and taxes on routers and switches, the products Cisco sells across the world as a near monopoly. "India today has the highest duties on networking equipment at about 39 per cent. Compared to this, other Asian countries have duties of 0-15 per cent only," Mr Chugh points out. He hopes the forthcoming Budget will bring the tariffs down.

But apart from such worries, Mr Chugh has little to complain about the Indian market as his business is thriving on the back of zealous adoption of networking by companies, banks and Government departments. Today, India is one of the top markets for Cisco in Asia (excluding China and Japan), along with Taiwan, Hong Kong and Vietnam.

"Cisco is not small in India. We have a market share of 69 per cent in India in the last quarter," Mr Chugh claims, quoting IT market research firm, IDC. He refuses to disclose any sales numbers, but says that the significance of the Indian market can be gauged from the fact that Cisco has set up a multi-million dollar logistics facility in Bangalore to stack up spares.

"Companies in India have realised that business uptime is equal to network uptime. So from `nice to have', networks have become `need to have', he said in an interview to Business Line. "They now know that networking is extremely critical for organisations to improve efficiencies."

Sectors such as telecommunications, banking and financial services, IT-enabled services and software services are fuelling the growth of network equipment business in the country. E-governance projects are also driving sales of such gears. According to IDC, the Indian data communication equipment market is expected to touch Rs 6,248 crore by the end of 2006, growing at a compounded annual rate of 27 per cent.

"In the current year, there will be a little more to this growth: people are now building greater intelligence to their networks. They are opting for value addition such as IP telephony, more security and wireless when they set up networks," the Cisco official said, adding that another goal for the company in 2003 would to reach out to more cities and towns.

Cisco, in India since 1995, operates through nine leading systems integrators (SIs) and three distributors and about 1,500 resellers. Some of the SIs for Cisco in India are Wipro, HCL Comnet, HP, IBM, Tata Infotech and CMC.

Asked whether Cisco would outsource products from Indian companies as it did elsewhere in the world, Mr Chugh said the company may go for such a move in the future, provided Indian vendors were able to come up with products that would match world class quality standards. However, Cisco currently outsources significant amount of software from India through its own development centres and partners.

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