5G services: Cisco sets $5 billion aside for funding

5G services
5G services: Cisco sets $5 billion aside for funding

The launch of 5G services is expected to shift focus to enterprises, which could become potential sources of revenue for telcos

To fund projects for 5G services, the US based Cisco Systems, Inc., has set aside $5 billion. In India, the company will invest a part of it 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.

Cisco Capital, the financing subsidiary of the firm will provide the funding to the technology company, which works with major telcos in India including state-owned Bharat Sanchar Nigam Ltd (BSNL), said Bhaskar, but did not disclose the amount set aside for projects on 5G services in India.

“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.

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

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

“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. Currently, from consumer mobility or mobile services comes a significant chunk of the revenue of telcos, which is likely to change once 5G services are rolled out. Even as Cisco works on strengthening the back end to ensure that the use cases are supported by networks, the firm plans to collaborate with telcos to build use cases in the enterprise segment, 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, said Bhaskar. 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,” said Bhaskar.

In the past five years, for 5G services, Cisco has invested $30 billion in research and development (R&D). 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.

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