RCom buys US Ethernet major Yipes for 1,200 cr

New Delhi, July 16: India's second largest mobile services provider Reliance Communications Ltd said its subsidiary Flag Telecom has acquired privately-held US-based data communication company Yipes Enterprise Services Inc for in an all-cash deal valued at Rs 1,200 crore ($ 300 mn).

The acquisition of Yipes is a key step in the RCom's plan to move up the value chain and closer to its customers in the Global Data business. It significantly increases the Company's revenues from the enterprise segment internationally, said a statement.

''This is the largest acquisition that Reliance Communications has ever made. The acquisition of Yipes drives forward our strategy to offer the most sophisticated, cutting edge data communication products and services, specialising in application and content distribution, spanning developed and emerging markets,'' said Relaince Communications Chairman Anil Ambani.

We confidently expect this acquisition to significantly enhance the growth rate, profitability and returns of our global data business, he added.

Yipes, headquartered in San Francisco, owns over 22,000 route kilometres of fibre across 14 US metros, which covers around 40 per cent of the total US datacom market. In addition, Yipes is present in London, Hong Kong and Tokyo.

Yipes is the leading direct communications provider to the New York Stock Exchange, Chicago Mercantile Exchange and NASDAQ and interconnects with multiple market participants and intermediaries.

RCom is also expected to spend Rs 1,000 crore to roll out Yipes' services in Asia, Africa Middle-East and Europe in the next one year. With the backing of Flag Telecom, Yipes will rapidly double its coverage of the US market, added the statement.

At the same time, Yipes Ethernet services will be overlaid on Flag's global next generation network, allowing Yipes to expand its reach worldwide and enabling Flag to create significantly more value from its network assets in the strongholds of India, the West East, and East Asia.

With the acquisition of Yipes, Flag Telecom is expected to accelerate its penetration into the lucrative Rs 400,000 crore (100 billion dollar) global enterprise data market and will be able to serve better its international customers directly in the US.

UNI