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Cisco may acquire Indian software companies

Cisco, which has mainly grown through mergers and acquisitions world-wide, attained a market capitalisation of $100 billion in just over eight years after its initial public offer, a record which puts even Microsoft in the shadow.

T O D A Y

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The Cisco technical team, which is responsible for acquisitions world-wide, is closely studying many Indian software companies and may announce a take-over soon.

Bruce Nelson, chief science officer, Cisco, has confirmed this and added that the acquisitions would be made mainly in the software sector because India can hardly boast of any good hardware companies.

"The main advantage with Indians is that they are very comfortable with the English language and are competent in the field of software," Nelson said.

"Cisco is unlikely to take over a company with all, say, French-speaking people. We would certainly be more comfortable acquiring a company where English, which is the language of the Internet as well, is easily understood."

Elaborating on India's IT and telecom industries, Nelson said that he was impressed with Prime Minister Atal Bihari Vajpayee's statement on resolving issues in the telecom sector and granting licences to Internet service providers within a specific time frame.

"India needs to release the basic infrastructure and tariffs to get competition in the field of telecommunication. If the bandwidth for telephony is made available, India could get more business from companies like Hewlett Packard, Cisco or even Intel," Nelson said.

"Singapore has really benefited from the privatisation of the telecom sector. It's probably the main reason why corporations prefer to have their headquarters in Singapore than in India," he added.

Nelson observed that it would be difficult for Indian telecom players, especially the national service providers like MTNL and DoT, to accept Internet telephony.

"Internet telephony is for real and it is only a matter of time when it will be common in India too," he explained.

"The main resistance to this concept will come from national service providers who have calculated depreciation on 15-20 years. With Internet telephony, depreciation calculations have to change," he added.

- Compiled from the Indian media

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