Reliance acquires US based Yipes Holdings for $300 million

MUMBAI: Anil Ambani‘s Reliance Communications has acquired for $300 million US-based Yipes Holdings, a leading provider of managed Ethernet services.

This is Reliance Communications largest acquisition and would accelerate the company‘s penetration into the lucrative $ 100 billion global enterprise data market.

Reliance will rapidly expand Yipes coverage within the US and take Yipes to nearly 40 new markets globally where Reliance is already present in Middle East, Asia and India.

By synergising Flag and Yipes, Reliance is looking to become a leader in Ethernet which will be worth $ 25 billion market wordwide by 2010.

Yipes is strongly positioned in Ethernet, by far the highest growth segment in the US datacom market, with an annual growth rate of over 30 per cent. It has a strategic network presence in the top 14 US metros, which account for 40 per cent of the total US datacom market.

Yipes has nearly 1,000 enterprise customers and provides mission critical communications platforms for entire industry communities.

Says Reliance Communications chairman Anil Ambani, "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.

" We see enormous potential to rapidly expand Yipes coverage in the US and to globalise Yipes service by leveraging our customer relationships and network reach around the globe. We confidently expect this acquisition to significantly enhance the growth rate, profitability and returns of our global data business. "

Established in 1999, Yipes has pioneered Metro Ethernet and has developed edge proprietary products to meet the exacting requirements of its customers. Ethernet is the fastest growing segment of the data communications market, driven by the migration of enterprise customers from older private network technologies. Infonetics Research forecasts the Ethernet services market will surge by over 30 per cent CAGR from 2006 to 2010 when it will top $ 25 billion worldwide.

Yipes has nearly 1,000 enterprise customers, concentrated across four industry verticals - financial, legal, government and healthcare - which currently account for 50 per cent of the Ethernet market.

Yipes has developed communications platforms that act as the oxygen for entire industry communities. For example, 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.

Says Yipes CEO John Scanlon, "Yipes pioneered Metro Ethernet services, extended it across the US and is poised to expand globally. With Reliance Communications, we aim to replicate our success in the US across the rest of the world. The financial sector, in particular, presents a key opportunity for us as we are well positioned to capture the market by meeting the fast-growing and stringent connectivity requirements of financial exchanges around the world. The financial connectivity market alone is expected to reach $ 6.3 billion by 2010 and grow at around 35 per cent per annum."

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