Cisco Goes Where No WiMax Has Gone Before

You might think that the global market for high technology ends somewhere around Austria, New Zealand, and Singapore. Well, think again. What we may see as the developing world is hungry for high tech, too. There are tons of untapped markets to sink your teeth into.

Take Cisco Systems' (Nasdaq: CSCO  ) latest customer announcement, for example. A new mobile WiMax service, brand-named AERO, was built around Cisco hardware from the ground up. A million residents and plenty of local businesses can now connect to the Internet anywhere within a vast, sparsely populated area. This wide-reach, high-speed technology is still unavailable across most of the United States, despite the best efforts of Intel (Nasdaq: INTC  ) , Google (Nasdaq: GOOG  ) , and a gaggle of cable service providers to push their Clearwire (Nasdaq: CLWR  ) access.

Those Cisco servers and base stations are not going to Kentucky. They sit in Karaganda, in central Kazakhstan. Go ahead and look that up on a map. I'll wait right here. Yeah, that's the far reaches of Borat's supposed motherland. You got it.

Karaganda is so remote that the Russians use the name as a punch line in jokes. Yet this isolated city and the steppes around it probably got WiMax goodness before your cozy hometown. "In 2009, we plan to expand AERO further across several regions of Kazakhstan and add video to our offering," says Stepan Vadyunin, service provider AsiaBell's CEO.

There is a scarcity of current technology in places like Karaganda, or Laos, or Belize, and in thousands of other obscure corners of the Earth. But the people there want the same conveniences that we have, and farsighted businesses like Cisco, Nokia (NYSE: NOK  ) , and IBM (NYSE: IBM  ) are going after those opportunities with a vengeance.

This particular deal is not huge for Cisco itself, but the company is working on dozens of contracts like that one, if not hundreds. So the next time you see a tech company's growth faltering stateside or in Western Europe, just remember that it's a very big world out there. Big deals can happen in unexpected places.

You may want to grab a free 30-day trial pass to Global Gains to find a few stocks growing close to these places. And keep an eye on the "international" or "emerging markets" segments of the companies you already know.

Further reading for make glorious benefit to Fool:

Nokia and Intel are Motley Fool Inside Value recommendations. Google is a Rule Breakers selection. The Fool owns shares of and covered calls on Intel. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On February 11, 2009, at 1:04 AM, RaulChapin wrote:

    So did you just up and decide to place any "far and obscure" country in your punchline?? or did you actually research technology in Guatemala or Sumatra. "If Borat can have WiMax, just imagine the high-tech wonders people demand in Guatemala or Sumatra."

    I am Guatemalan and while I believe you might actually have an idea about technology in that country I am still unsure if you do.

    That being said, CISCO was working on plans like the one you talk about for a long long time. One of their visionary programs is the Cisco Networking Academies. They train CCNA's and CCNP's in developing countries at an 80% discount to what it cost to get the same education in the USA or Canada. (I did half my CCNA in Guatemala 2004, the other part in Toronto, Canada)

    Further more, to those with good marks they give discount vouchers for the examinations.

    To drive the point home, when I was giving service to micro loan institutions around the world, the lowliest of our techies in Tanzania was a CCNA and believe me he was not rich. Why does Cisco do this... because when Nortel (now defunct) or ... (place name here) finally realize that the "third world" is not just bast wasteland and cow hearding people... the de facto standard will be Cisco... or do you think the IT force will just up an re learn networking...

    Now dont get me wrong, Dlink for example gets a lot of use in the lower end of the spectrum, and thus why Cisco pushes their Linksys stuff as well (the idea being that linkys is almost as good as Cisco at a price comparable to DLink)

    More recently (In 2008) Microsoft began a similar plan. Knowing that the availability of qualified technicians is a strong factor in deciding which technology to use (a reason why MS Office is still alive despite the availability of free suites of comparable value) they now provide to university students and graduates in Guatemala (As far as i know Galileo University Students) FREE licenses for Every Microsoft product other than office... this means Windows 200x Servers, SQL Server, Visio, Microsoft Windows (up to two licenses), Microsoft Visual Basic, C# etc etc. The only catch is that if you use them comercially then you have to purchase the license. In the mean time however you can try and train in a lot of expensive software for free.

    Anyway, in my wife's words (Canadian) "What people don't understand is that, in the thirld world, countries still have to be ran" Which means you need telecomunications, software, a banking system etc etc. Those who see the oportunities there and are humble enough to understand that the "American" way is not the only way... can make a ton of money.

  • Report this Comment On February 11, 2009, at 5:17 AM, TMFZahrim wrote:

    Hey Raul,

    thank you for weighing in. My point wasn't that Guatemala is a technological backwater, but that most Americans sort of expect it to be. For the record, my wife is Guatemalan (and I'm Swedish, yay for international families), and I've spent happy weeks in Antigua working through an EV-DO modem before I'd ever seen one stateside.

    It's a big world out there, full of opportunity and surprises. High tech in "developing" nations doesn't surprise me anymore, though.

    Anders

  • Report this Comment On February 11, 2009, at 9:23 AM, wolfhounds wrote:

    Question to you Fool techies. Do companies like INFN or CRNT stand to benefit from this?

  • Report this Comment On February 12, 2009, at 1:41 PM, RaulChapin wrote:

    Hey Anders,

    Such a nice surprise to hear that you have been to Antigua... and my apologies for the bit of sarcasm in my note...

    Raul

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