Cisco Systems and Qwest Communications International have announced an agreement to develop one of the largest Internet Protocol-based networks in the US.
Under this announcement, more than 80 per cent of Qwest's telecommunications services will move over Cisco-built networks, the companies said. The deal also involves application development and marketing of Internet services. Both companies will co-develop applications for Internet-based data, phone and image services to be sold to businesses and consumers, they said.
"Cisco is moving forward with the integration of data, voice and video over the Internet, and Qwest has a high-speed Internet network," Jeanette Gibson, a Cisco spokeswoman, said in a telephone interview. "By working together, we can speed up the migration from traditional networks to Qwest's high-speed network."
The announcement follows closely on the heels of Qwest's $US55 billion bid announced last week to purchase phone companies US West and Frontier Communications, an action that would allow Qwest to move US West's traditional network onto Qwest's Internet protocol (IP) backbone.
Qwest's proposed acquisition of US West will greatly strengthen its plans for building its Internet network, Cisco president and chief executive officer, John Chambers, said. "US West is leading all local-exchange carriers in the migration of their traditional telephone network to the Internet," he said.
Once Qwest completes the acquisitions it will migrate the US West and Frontier networks from circuit switching to IP, the company said.
Meanwhile, the Cisco-Qwest agreement should also significantly enhance Cisco's sales of telecommunications equipment, said Sanjay Mewada, an analyst for The Yankee Group.
"The agreement will provide Cisco with a very significant footprint in the telecommunications market," he said. "And if Qwest buys US West and Frontier, it enables Cisco to sell to US West."
The Qwest Macro Capacity Fiber Network, using the newest optical networking, will reach more than 18,500 miles (29,772km) in the US when it is completed later this year, and an additional 315-mile (506km) network will be completed by the end of the year, the company said.
Cisco has also announced the expansion of operations in India. The company will open an engineering and research centre in Bangalore that will support development agreements with local partners and test its products. The first phase of the expansion will involve investments of more than $20 million. Cisco currently has offices in New Delhi, Chennai, Mumbai, Bangalore and Calcutta.