BANGALORE, India Intel Corp. will invest $100 million in venture capital in India this year, the company said. Most of the investment will go to build network infrastructure for the Internet.
The investment is similar to Intel's stake in Hong Kong-based Pacific Cyberworks, which is building out China's Internet infrastructure.
The company also said it plans to expand its software development center here from 50 to 500 staffers in the next three years.
Craig Barrett, Intel's president and chief executive, announced the plans during his two-day visit to India in late May. The visit was part of a five-day Asian tour that also included stops in Malaysia, the Philippines and Hong Kong, where Barrett met with regional business and government leaders.
Speaking to an industry conclave in the western Indian city of Mumbai, Barrett said, "A robust national telecom backbone is mandatory and, ideally, that facilitates data and voice convergence on a single telecom network."
Earlier, he told another gathering in New Delhi that "India is at a strategic inflection point, and two of the major technological challenges facing the country today are low bandwidth and the high cost of Internet access. These have to be addressed [for India] to compete in the race for Internet leadership.
"Reforms in the Indian economy and the liberalization of the telecom sector are very positive signs, but there is a lot more to do on building a world-class telecom infrastructure," Barrett said.
The Intel chief said the quality of Indian electric utility services must also improve in order to attract more semiconductor fabrication facilities to India. Intel has no plans to build a fab in India, he added.
While Barrett said he sees a significant role for India in the Internet world, he said that the number of Internet users in the country, now approaching 2 million, is insignificant as a percentage of the country's population of 1 billion.
On investments in India, Barrett said Intel would look at small equity investments in the range of about $7 million each. The priority is to invest in startups in the areas of hardware, software, services and applications that can bring new technologies into the Internet marketplace. Intel already has investments in about 15 startups in India, including two portals. Most recently it invested an undisclosed amount in Persistent Technologies, a company based in Pune in southwestern India. The venture will serve as a competency center for Itanium, Intel's new 64-bit microprocessor. The Pune company will also help other Indian firms move their software solutions from 32-bit to 64-bit processors. Intel will set up a server farm in Mumbai as well.