Cisco CEO John Chambers with IT minister Dayanidhi Maran in New Delhi on Wednesday. Picture by Rajesh Kumar

New Delhi, Dec. 6: Global data networking company Cisco Systems today announced plans to set up a pilot facility in Chennai to manufacture internet protocol phones by March 2007.

The move, which comes on top of Cisco’s $1.1billion investment in the country in the last year, may see another $1billion being invested here.

The company, however, refused to give investment figures and production details.

Cisco will also triple its workforce in India from 2,000 to 6,000 within three years.

The move was welcomed by the government, which wants India to become a hardware manufacturing base apart from being a call centre and software development base.

“Cisco’s growing investments across all operations 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,” said communication minister Dayanidhi Maran.

“In line with the company’s outsourced manufacturing model, Cisco has selected one of its global partners Foxcon to work on the manufacturing facility,” said Cisco chief John Chambers. He added the company would soon be scouting for local partners.

Industry analysts said setting up an IP phone manufacturing unit in India entails an investment of $800million to $1billion, depending on the number of units slated to be manufactured.

Chambers said 5 per cent of Cisco’s global revenues of $28.5billion would come from India within the next two to three years. The country will also provide half of the growth in its staff numbers.

“India is a very important market for Cisco's global growth strategy and we expect to triple our workforce to 6,000 in India in the next three to five years,” said Chambers.

The Cisco CEO also said the company would invest $50million for a new research and development campus in Bangalore, which is expected to be completed by June 2007.

The US networking company, which has allocated $100 million venture capital investment in high-growth companies based in India, plans to invest another $25-30million over the next few months in broadband content and digital media. These investments are part of the $1.1billion that the company had committed in November 2005.

Cisco has also launched TelePresence — a technology innovation that creates a unique, “in-person” experience between people, no matter where they are located.