Because of the size of our projects and thus the massive investments in the infrastructure (including technology hardware, equipment, and peripherals), we have always deemed it wiser to design and develop what we need rather than buying it from vendors. In the long run, it would be more interesting for our company and investors to supply ourselves in the most critical (and capital expenditure) links of our food and supply chain. Cisco has great products, but because of our philosophy, we have always looked for OEM partners rather than to the likes of Cisco.

First, it should be understood that GigaSpeed is the communications company of the future. We have a massive Fiber To The Home and Broadband Wireless Access project planned that will cost almost $40 billion over a period of 6 years. (The Break Even Point is at $1.5B according to our FiberBroadband Strategy planning, thus the rest of the massive investments will be paid from retained earnings). Almost half ($20 billion), of this investment will go to (wired and wireless) technology hardware, equipment, and peripherals. It would be stupid to NOT do this on your own. Our CTO, Dave Croslin, has the mandate to create this “ICT” vertical. He is a great futurist and visionary who served as Chief Technologist of HP’s $9B Communications, Media & Entertainment vertical before he joined us. (If you happen to be a potential partner, join our group and then introduce yourself). NOTE: we believe in active Ethernet, all IP as being the only future-proof solution, which means that if you are in PON technologies, you don’t need to try.

Om Malik refers to an interview Cisco CEO, John Chambers, gave to Barron’s Eric Savitz wherein he stated that Cisco will be “focusing its energies on buying companies to expand into the consumer electronics arena.” This is interesting and exciting news for the CE and IT industry. Maybe also for GigaSpeed.

Coming to my second point then… 

Put simply, if Cisco would invest in our poor little company, we would not have to go through the trouble of becoming our own ICT supplier, which would be good for our focus. The argument that it would be great for investors would also be answered by the fact that Cisco would be the investor. In any case, if Cisco is willing to put money on the table, we could take this to the next level. If not, then we are going to do what we were planning anyway – and buy from ourselves.  

2009 is the year of action.

After almost 9 years of planning and researching (along the way metamorphosing and restructuring ourselves several times), we are ready for the big push. We have access to capital and we have the teams to excute the vision and plan. But, we will not start in the USA. Instead, we focus first on The Netherlands, where the project is smaller but still big for Dutch standards. Our Dutch FTTH and BWA project will cost almost €5 billion over a period of 6 years. (The BEP is at €250). Almost half (€2.5 billion), of this investment will go to (wired and wireless) technology hardware, equipment, and peripherals.  

To give an example, we BELIEVE in the ADVANCED set-top-box at the customer’s home; we do NOT want to place a thin client or simple CPE at the subscriber’s location. In the Dutch €5B project, the STB investment is approximately €500M. (Main reason being that our “Unlimited Play” approach calls for putting the customer in charge of what, how, when and where – making a state-of-the-art, ultra-smart STB a must). 

We discuss above issues in detail in our new Strategy Document.