Cisco Systems, the world's biggest maker of data networking equipment, plans to launch a business group, based in Bangalore, India, that will wire new buildings and even entirely new cities with state-of-the-art networking technology.
The group would be Cisco's first business unit to have its headquarters based outside the US.
The move comes as a construction boom is sweeping the Middle East, India and China, where dozens of cities are planned to accommodate an expected rise in urban populations during the next decade.
"There are millions of people in these countries that will be urbanised over the next 10 years," said Marthin De Beer, head of Cisco's emerging technologies group, which will run the business. "This is clearly a multi-billion dollar opportunity. We expect it to be worth at least $10bn over the next 10 years."
China estimates it will need to build 40 cities over the next 10 years to accommodate migration of workers from the countryside. In Saudi Arabia, authorities plan to build several cities in a bid to compete with Dubai and as a business hub.
Cisco hopes to convince the developers and governments in charge of these projects to leapfrog older telecommunications systems that are common in more advanced economies, by installing internet protocol, or IP, networks instead. Such networks are gradually replacing older systems, as the internet emerges as the preferred medium for data, video and telephone traffic.
A city wired top-to-bottom with IP technology would be able to use it to manage infrastructure, such as traffic signals or surveillance cameras, while residents would be able to use it to access media content or control energy use in homes or office buildings, Cisco said.
Cisco, which makes everything from the switches and routers that direct data along the internet backbone to IP-enabled telephones and television boxes, could be in a unique position to take advantage of opportunities presented by the expected construction boom, according to Inder Singh, an analyst at Lehman Brothers.
Cisco stressed the project was at an early stage. It is part of a broader push into developing countries by the group.
Wim Elfrink, Cisco's chief globalisation officer, recently became the first of several top executives to be based permanently in Bangalore.
