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Rediff.com  » Business » RCom buys US Ethernet major Yipes for $300mn

RCom buys US Ethernet major Yipes for $300mn

Source: PTI
July 16, 2007 13:52 IST
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Anil Ambani Group firm Flag Telecom on Monday announced the acquisition of US-based Ethernet services provider Yipes Communications for 300 million dollars (Rs 1,200 crore) in cash - a deal that would scale up its optic fibre network and give it a footprint in the American market.

"Yipes has 22,000 km of optic fibre network... has operating margin of 55 per cent and is cash positive," Reliance Communications chairman Anil Ambani said. He said Reliance Communications, which owns Flag, will spend Rs 1,000 crore (Rs 10 billion) to roll out Yipes' services in Asia, Africa Middle-East and Europe in the next one year.

Yipes existing customers include Verizon and NTT. RCOM also sees a four to five per cent increase in revenues of Yipes over the next 4-5 years. Ambani said Pramod Haque, managing partner of Norwest Venture Partners would be joining the company.

Flag Telecom is a leading provider of international network transport and data services to telecom operators and content providers and Internet communities across the globe.

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