CISCO SYSTEMS SEES MASSIVE POTENTIAL IN AFRICA

Computing

Networking company Cisco Systems expects to sustain annual growth of 10%-15% for the next few years as the volume of traffic carried on global networks surges as much as 500% a year. Much of Cisco's growth is expected to come from emerging markets, including Africa, where its business is growing 30% a year. "That's where we are making our investments for growth," CEO John Chambers told analysts in Santa Clara on Tuesday.

Twelve percent of all new employees are being hired in emerging markets, and its investment focus on the region will continue for the next several quarters.

So far the 129 countries classed as emerging markets account for just 10% of the Nasdaq-listed company's revenue, which hit $24,8bn in financial 2005. Chambers believes emerging markets could generate up to 40% of Cisco's potential growth in the coming years.

Cisco's vice-president for emerging markets, Paul Mountford, thinks Chambers is under-estimating the potential, and predicts growth of up to 47% a year in his territories. "There is an absolutely huge opportunity," he said.

The 129 countries cover 37% of the world's population, yet only 1% of the people have broadband internet access. "It's all about land-grab. That's why these countries are so important to us. First-mover advantage is critical in these markets, and there's not really a comprehensive first mover in any of the top 20 countries which generate 80% of the business volumes today," he said.

SA is among the top 20 performers of his 129 countries. Many African governments were beginning to spend heavily on telecommunications networks, seeing them as a platform through which to connect communities and start to challenge poverty, he said.

Business Day