India to be part of Cisco’s $5 bn funding for 5G projects

US-based Cisco Systems, Inc., which has set aside $5 billion to fund projects for 5G services globally, will invest part of it in India to help telecom operators build crucial components of wireless networks comprising core, transport, mobility, and security solutions, Anand Bhaskar, managing director, service providers, Cisco, India and SAARC, said in an interview.

The technology company, which works with major telcos in India including state-owned Bharat Sanchar Nigam Ltd (BSNL), will draw the funding from Cisco Capital, the financing subsidiary of the firm, Bhaskar said. He, however, did not disclose the amount set aside for India projects.

“Cisco has kept aside $5 billion to support 5G projects globally. This will come from Cisco Capital, which is the financing arm that we use to support our customers. In India as well, we work using our global financing fund. We will dip into that pool to help our clients in India,” he said.

Reliance Jio Infocomm Ltd, Bharti Airtel Ltd, Vodafone Idea Ltd, Tata Communications Ltd, and Sify Technologies Ltd are some of the companies that use products and solutions provided by Cisco.

The company is working with telecom companies to help them build the back-end network for the 5G rollout and develop use cases for end clients, Bhaskar said. The rollout of 5G services will require large-scale deployment of optical fibre cable and towers and, thus, infrastructure providers play a critical role in creating the ecosystem ahead of the launch of the next-generation technology.

“When you move from 4G architecture to 5G, the first thing is upgrading the backhaul and core network, which is where we are partnering with telecom service providers. The second area where we are partnering is developing use cases for end clients,” Bhaskar said.

The launch of 5G services is expected to shift focus to enterprises, which could become potential sources of revenue for telcos. At present, a significant chunk of the revenue of telcos comes from consumer mobility or mobile services and this is likely to change once 5G is rolled out. Cisco plans to collaborate with telcos to build use cases in the enterprise segment, even as it works on strengthening the back end to ensure that these use cases are supported by networks, he said.

The company does not plan to enter the business-to-consumer segment, but will increase focus on SMEs as the scope in India is massive, Bhaskar said. Cisco aims to partner service providers to tap small businesses as it is a key growth sector.

“We aim to see how we can collaborate with telecom operators to tap into opportunities in the small and medium business segment, which is a key sector for us. That is where our focus is now,” Bhaskar said.

Cisco has invested $30 billion in research and development (R&D) for 5G in the past five years. This includes hardware, development of chips, acquisitions and software that will enable managing of the network as they get more complex with the roll out of the 5G services, he said.