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PRESS RELEASE

Cisco Announces Strategic Investments in Brazil to Foster Innovation, Transformation and Socio-Economic Development

New Investments in Rio Innovation Center, Venture Capital Fund and Manufacturing Expand Cisco's Presence in Brazil and Support National Development Through ICT

RIO DE JANEIRO, BRAZIL, April 2, 2012 - Cisco announced today new strategic investment initiatives in Brazil to foster innovation, transformation and socio-economic development, expanding Cisco's presence in the country and highlighting the importance of investments in information and communications technology for the country's growth and competitiveness.

Cisco will invest over R$1 billion during the next four years around four main pillars: (1) the opening of a Cisco center of innovation in Rio de Janeiro; (2) investment in a Brazil-focused ICT and digital economy venture capital fund; (3) the expansion of local manufacturing in the country; and (4) intellectual property agreements and partnerships with Brazilian companies and entities to co-develop innovations to better serve the market.

Cisco expects these investments will generate around 800 jobs in Brazil, directly and indirectly through its partner ecosystem, and more importantly, will create a platform for innovation and high-tech entrepreneurship in Brazil. The investments represent Cisco's commitment to Brazil's top innovation priorities and a long-term presence in the country.

Additionally Cisco will keep its commitment to the Corporate Social Responsibility and Research & Development initiatives in the country.

The announcements were made during the opening ceremony of the Cisco Plus event in Rio de Janeiro in the presence of Brazilian Minister of Communications Paulo Bernardo; Rio de Janeiro State Governor Sergio Cabral; and the Mayor of the City of Rio de Janeiro, Eduardo Paes.

1. Cisco Rio Center of Innovation

Cisco will open a center of innovation in Rio de Janeiro to develop new technology solutions specially tailored for Brazil's needs. Cisco expects to inaugurate the center in the second half of 2012. The Cisco Rio Center of Innovation will integrate Cisco's portfolio with technology from local players to create solutions that meet the needs of the Brazilian market.

The Cisco Rio Center of Innovation will initially focus on developing local solutions for urban development (Smart+Connected Communities), sports and entertainment, public safety and security, education and health care. Additional solution areas will be integrated in 2013, including those for oil and gas, and SmartGrid/smart energy.

  • Urban Development: The Cisco Rio Center of Innovation will support Cisco's global Smart+Connected Communities efforts in Brazil, which aim to implement Cisco® technologies via a service-delivery platform to enhance access to Internet-based services, spur economic development, and reduce the cost of government operations. These solutions are vital to the development of a more efficient urban infrastructure and growth of Brazilian cities, both in cases of new developments as well as the redevelopment of existing areas.
  • Sports and Entertainment: The Cisco Rio Center of Innovation will look to support Brazil's preparations for the World Cup and Olympics Games developing solutions that transform the nature of sports and entertainment experiences through network-based innovation. Cisco Connected Sports solutions bring together all forms of communication and entertainment onto a single network—connecting venues, teams, and their fans in entirely new ways - and creating sports venues that continue to produce and provide ever growing value after the game events.
  • Public Safety and Security: The Cisco Rio Center of Innovation will leverage Cisco's open platform for security solutions. Through Cisco's ecosystems of partners, Cisco intends to help Brazil's public and private sector customers protect the population and optimize the resources used to respond to situations, improving precision and timeliness. This is achieved through the convergence of security systems such as sensors, video, telephone, and radios, with systems integrated on a common Internet Protocol platform. These solutions can be integrated into Cisco Sports and Entertainment, Urban Development, Oil and Gas and other solutions.
  • Education: Technology is critical to increase access to education as well as improve teacher training and student learning, one of Brazil's priorities. In the connected world, technology and specially the network is critical to impart the skills that students need to succeed in the global economy. The Cisco Rio Center of Innovation will look to extend Cisco solutions to the specific needs of Brazil to continue improving the quality of instruction and education assessment, create innovative learning models, improve decision-making and reduce costs with administrative efficiency.
  • Health Care: The shortage of medical specialists in certain regions, the rising costs of health care, and the growing proportion of people with chronic diseases are some of the challenges faced by health care providers in Brazil. Using the network as a platform, Cisco HealthPresence® solutions combine high-definition video, audio and clinical information for patients to increase the efficiency of medical professionals and their organizations; make available health care to more people; improve patient experience; and increase the availability and flow of information. The Cisco Rio Center of Innovation will develop specific health care solutions for the Brazilian market.

2. ICT and Digital Economy Venture Capital Fund

Cisco is looking to create one of the leading Information and Communications Technology and Digital Economy venture capital funds in Brazil to foster the development of new Brazilian technology companies and entrepreneurship in the country.

Cisco will seek to invest up to R$ 50 million in addition to the investment from local players that will be partnering with the selected fund. Brazil's information and communications technology market has huge economic and innovation potential. Recognizing this potential, Cisco's intention is to accelerate the introduction of new technologies and provide a competitive advantage through early investments in burgeoning technical innovations, supporting the development of high-growth small and medium-sized companies in the technology, digital media and telecommunications sectors.

3. Expansion of Local Manufacturing in Brazil

Cisco started local manufacturing in Brazil in early 2011, with the introduction of locally produced set-top boxes. Since its inception, the plant in Manaus has already expanded twice. With the current announcement, Cisco will expand its local manufacturing operations to include some of the best-selling models of its core routing and switching products, which will be produced in Brazil through one of its manufacturing partners. This expansion will be in compliance with PPB (Processo Produtivo Básico) and will reinforce Cisco's investments in local development.

4. Intellectual Property Agreements and Partnerships with Local Companies

Cisco is looking for opportunities to develop agreements with local players and partner with local Brazilian companies in order to address key areas of the Brazilian market and foster the development of local technology while strengthening Brazilian's ICT industry.

  • Recently, Cisco announced an intellectual property agreement with Intelbras to serve the growing Internet Protocol telephony market in Brazil. The companies are working together to help small and medium-sized businesses in Brazil increase collaboration by utilizing the recently announced Cisco Unified Communications Manager Business Edition 3000 and the licensing of Cisco Unified Communications technology for selected Intelbras IP phones and gateways. Cisco and Intelbras will make the Cisco Unified Communications Manager Business Edition 3000 available through Intelbras' 10,000-plus channel partners in Brazil. Medium-sized businesses - those up to 300 users - would be able to enjoy the benefits of a cost-effective Unified Communications system with professional features that can support future growth.
  • Cisco is announcing a Workforce Transformation Program (WTP) agreement and partnership memorandum of understanding with SENAC RJ (Serviço Nacional de Aprendizagem Comercial) which will benefit over 1,000 students in Rio interested in pursuing a career in networking.

Corporate Social Responsibility and Research & Development initiatives

  • In the critical area of Research & Development, Planetary Skin Institute, a global independent nonprofit research and development organization initially incubated by Cisco and NASA, has developed multiple agreements with leading Brazilian R&D institutions in government, academia and the private sector to co-develop network-centric resource and risk-management decision platforms critical to maintaining Brazil's leading international role in sustainable development.
  • Cisco will continue to expand its corporate social responsibility initiatives in the country. In particular, the Cisco Networking Academy™ program, which is the largest ICT education program in the world, is already approaching 25,000 students annually in Brazil with more than 250 academies throughout the country. The program has established partnerships with several public and private institutions to continue expanding the number of students nationally.

All of these investments signal a long-term commitment to the country, and will support the very fast growth of Cisco and the expansion of its operations and projects in Brazil, in partnership with both public and private sector partners.

Supporting Quotes

Brazilian Minister of Communications, Paulo Bernardo

"Cisco investment announcement in Brazil is further evidence of the strength Brazil is demonstrating in the global market and the consistency of the country's economic policy. Brazil is an attractive for investment because we have a market in frank expansion, and clear rules that stimulate production. Today we have several companies, including the technology sector, which are producing in Brazil, generating jobs and revenue. We believe this Cisco announcement meets the government's work to further stimulate investment and give new push to the Brazilian economy."
Governor of Rio de Janeiro, Sergio Cabral

"Rio de Janeiro has a fantastic momentum. Today, our state occupies the top positions in national rankings when it comes to attracting investment and creating jobs. All this thanks to a professional and refined management we have adopted with the federal government and with municipalities. I am very honored with this initiative from Cisco to create an Innovation Center in Rio. It is a great gift for the people of Rio de Janeiro and Brazil. The new investment of the company, no doubt, will help not only to increase the technology sector as well as further strengthen economic and social development of the state and the country."

Mayor of the City of Rio de Janeiro, Eduardo Paes

"The arrival of Cisco with the Rio Innovation Centre happens at the same time that Rio is reaffirming its vocation for technology and knowledge production, and also confirms the exceptional momentum that our city is experiencing, which has been recognized by the investment grades awarded by international agencies. The city and its citizens can only gain by the presence of a company committed to the environment, social development, employment generation and the production of innovative solutions to improve the quality of life of the population."

President Cisco Brazil, Rodrigo Abreu

"We believe in the transformative role which information and communications technology can play in the sustained development of a country and the economic inclusion of its population and companies. With today's announcements, we reinforce Cisco's long-term commitment to Brazil and expect to become a relevant partner in this incredible growth journey the country has been experiencing."

Key Facts & Figures

  • Brazil represents a key global priority and growth opportunity for Cisco
  • Cisco hopes to catalyze and accelerate technology innovation, education and economic growth in Brazil
  • Cisco created a Brazilian board within the company to lead Cisco's long- term strategy for Brazil and help increase Brazil's global competitiveness and standard of living by providing information and communications technology tools, knowledge and implementation through a public-private relationship
  • Cisco has committed significant personnel and operations to Brazil
  • In recent fiscal years, Cisco Brazil has been growing consistently above 20 percent year over year
  • Investments in Brazil for the next four years are planned to exceed R$1 billion.
  • The Cisco Networking Academy social responsibility program on ICT education currently has more close to 25,000 students enrolled in Brazil.
  • Brazil has over 250 Networking Academy sites nationally, which have trained more than 100,000 students since the program's inception in 1998.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com. Cisco equipment in emerging markets is supplied by Cisco Systems International BV, a wholly owned subsidiary of Cisco Systems, Inc.

# # #

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

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