Biggest buyout by Rcom:US based Yipes goes for Rs 1200 crore

Mumbai, July 16 (UNI) Anil Ambani-promoted Reliance Communications (Rcom), in its biggest ever acquisition, today bought US based data communication company Yipes Holdings at Rs 1,200 crore in all cash deal.

Yipes will operate as a strategic business unit, fully integrated with Rcom subsidiary, Reliance Telecom. The senior management of the Yipes will continue their present responsibilities.

Anil Ambani, Chairman, RCom said,'' This is the largest acqusition that Rcom has ever made. The acquisition of Yipes drives forward our strategy to offer the most sophisticated, cutting edge data communication products and services''.

Based at San Francisco, Yipes has a strategic network presence in Ethernet product business in the 14 US metros and bring nearly 1000 enterprise customers to Rcom. Yipes has a 40 per cent share of the total datacom market.

The company owns over 22 thousand route kilometers of fibre acroos US. Yipes is also present in London, Hong Kong and Tokyo.

With this acqusition, Reliance will accelerate its penetration into the Rs 40,000 crore global enterprise data market and will be serving its international customers directly in the US.

''Yipes ethernet service will be overlaid on Flag global generation network for rolling out in 30 more cities by the year end'', Mr Ambani added.

''Within next two to three years in the enterprise business Reliance is looking to garner a revenue of Rs 2500 crore which is only 10 per cent of the lucrative data communication business'' Mr.

Ambani added.

The data communication business of the company will be primarily driven by subsidiary Reliance Telecom in a synergy with Yipes.

The new entity will initially focus data communication markets in Middle East, Africa and India and has plans to expand its services across 40 countries by next three years.

It may be recalled that at the beginning of the year RCom had announced Rs 6,000 crore global expansion of its subsidiary FLAG next generation network which it acquired in 2003.

UNI