Reliance Communications (RCOM) has bought US-based Yipes Holdings, a provider of managed ethernet and application delivery services, in an all-cash deal valued at Rs 1,200 crore ($300 million). Ethernet is the default standard for computer-to-computer connectivity across the world in offices and organisations. Yipes will be a wholly-owned subsidiary of Flag Telecom, the undersea cable arm of RCOM. The global ethernet market is valued at $10 billion and it is forecast to grow at a compounded annual rate of 30% to $25 billion by 2010. Yipes would see an investment of Rs 1,000 crore in the next few years to roll out ethernet services in new areas.
The acquisition of Yipes will help RCOM overlay latest technology over Flag network. RCOM will expand Yipes coverage within the US and take Yipes to nearly 40 new markets globally, including Middle East, Asia and India, by connecting it to Flag and RCOM network.
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