News Release

Cisco Systems Signs US$200M MOU with Guangdong PTA

Cooperation Memorandum Covers Procurement, Education and R&D Over Five Years
Jun 22, 1999

GUANGZHOU, China -- June 22, 1999 -- Cisco Systems, Inc. has signed a Memorandum Of Understanding (MOU) with the Guangdong Provincial Posts and Telecommunication Administration Bureau (GPTA) that covers procurement of Cisco equipment worth US$200 million over the next five years.

The agreement also signifies intent between both parties to cooperate on a wide range of education and R&D projects, covering technologies such as IP (Internet Protocol) and ATM (Asynchronous Transfer Mode). For example, Cisco will help GPTA implement in-house education programs for its engineers, leading to the highly regarded CCIE (Cisco Certified Internetworking Expert) certification.

Under the MOU, Cisco will also provide marketing support via various programs tailored for service providers that provide market intelligence, strategy development, and training, and delivery vehicles to reduce time to market and quickly develop new revenue streams.

One of the first items the MOU covers will be an initial purchase of US$10 million worth of equipment for expansion of the Guangdong portion of China's 163 network (ChinaNet) and 169 China Multimedia Network ( ChinaNet, managed by China Telecom, currently supports more than 50 percent of China's Internet customers - roughly 600,000 users, including corporate accounts and private dial-up customers. China Multimedia Network is a nationwide network backbone that will support a range of domestic information service and advanced multimedia applications such as video-on-demand and distance learning.

This planned expansion will include an extensive array of Cisco AS5800 access servers, capable of providing 15,000 access ports for all GPTA Internet dial-up customers. Cisco's AS5800 and AS5300 families of high-end access products will form the technology platform for Guangdong's province-wide virtual private network (VPN) services, providing users with secure, low-cost corporate network services.

Commenting on the MOU, director Cui Xun of GPTA said, "Guangdong Province plays an important role in China's economic development, and the GPTA has been at the forefront of new technology development. Part of our overall development strategy, in line with Guangdong's economic reform and open policies, is to cooperate with large multinational IT companies such as Cisco Systems to develop southern China's telecommunications industry."

William Nuti, Cisco's VP of Greater Asia, said, "Globally, the telecommunications market is developing at a pace unimagined even a decade ago. China, including Guangdong province, is a world leader in the speed at which it has built its telecommunication infrastructure. Over the last three years, Cisco has cooperated closely with service providers around the world to build large-scale networks that integrate voice, video and data, and we are convinced that our track record with major companies such as AT&T, Cable & Wireless, China Telecom, Qwest and Singapore Telecom, brings to the table enormous experience in the building networks of the future. We intend to continue our active participation in China's telecom development and will further expand our investment plans for R&D, support and customer satisfaction."

Jia-Bin Duh, president of Cisco Systems China, said, "One of the reasons for Cisco's success is our collaborative approach to working with our customers and partners. We have made it our mission to help our service provider customers develop innovative services that open new markets and extend old ones. Only by helping to make customers such as GPTA successful will Cisco be able to grow further."

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