Reliance Communication buys US ethernet firm Yipes

Reliance Communications Ltd., Indias second-biggest mobile services provider today announced the purchase of the US-based Yipes Holdings Inc. for 300 million dollar cash.

Mumbai, July 16 : Reliance Communications Ltd., India's second-biggest mobile services provider today announced the purchase of the US-based Yipes Holdings Inc. for 300 million dollar cash.

"Over the weekend we have signed definitive agreements to acquire a 100 percent of US based Yipes holdings for a cash amount of 1200 crore rupees or 300 million dollars transaction," Reliance Chairman Anil Ambani told reporters.

San Francisco-based Yipes, a provider of managed ethernet and application delivery services, offered Reliance an opportunity to tap a fast-growing market, Ambani said.

The ethernet market alone was valued at 10 billion dollars, and according to forecast it would grow at a compound annual rate of about 30 percent to more than 25 billion dollars by 2010.

"We are continuously evaluating for inorganic expansion, which would enable us to leverage us as India's largest integrated and fully converged communication service provider and further accelerate the development of higher value added, higher margin services and a sustainable profit growth rate to enhance value creation for all share holders," Ambani said.

Yipes will become a wholly owned subsidiary of Reliance Communication's undersea cable unit, Flag Telecom, which it bought in 2003 for about 209 million dollars.

Reliance has plans to expand Yipes' coverage to 30 metro cities in the United States, from present 14 and would also take it to Asia, Europe, Africa and the Middle East.

ANI