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Cisco CEO remains confident on NDS

Cisco's CEO John Chambers told BT's Goutam Das that he is not worried about the firm's $5 billion NDS acquisition that appears to have run into rough weather because of allegations of hacking.

twitter-logo Goutam Das   Bangalore     Last Updated: April 2, 2012  | 12:17 IST

Cisco's CEO John Chambers has hinted he is not worried about the firm's $5 billion NDS acquisition that appears to have run into rough weather because of allegations of hacking.  While Chambers avoided a direct comment, he said the issue has been settled in court.

"I am not going to comment on something that happened 10 years ago. The US Supreme court resolved it very favourably in NDS' favour," the CEO told BT during an exclusive interaction in Bangalore.

Chambers was referring to EchoStar, a satellite TV company, which in 2003 filed a lawsuit accusing NDS of hacking its systems.  This January, the US Supreme Court ruled in favour of NDS awarding it $19 million in damages.

However, NDS faced fresh allegations this week from an Australian newspaper, The Australian Financial Review, which claimed the company was facilitating piracy by hackers with a motive to target rival media houses. Analysts were quick to remark that the allegations presented a reputational risk to Cisco.

NDS, which develops pay TV software, is Cisco's first mega acquisition in two years - the company was undergoing a restructuring after its performance slumped as the firm went after too many adjacent markets to its core business of routers and switches. The firm has now refocused it business on profitable sectors.

"Anytime you do a major acquisition, your stock goes down for quite a few days, or weeks after the acquisition. This isn't the case with our stock," Chambers said, talking about the NDS buy. "If you watch the market, we surprised them because they weren't expecting it. Our customers loved it. They understood the value. I like the NDS culture and direction. But all acquisitions have some challenges," he added.

The CEO said that Cisco was committed to India where its workforce would cross 10,000 people this year.

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