Following its $300 million bid to acquire Yipes Enterprise Services, India's Reliance Communications may spend an additional $200 million to polish its new gem in the hopes of creating a larger, faster return on its total investment. The money could be used to boost Yipes's annual capex, as well as to hire new staff and expand in markets throughout the world.
The Carrier Ethernet market has become a hotly-competitive one in recent years, and Infonetics Research has said it could be a $25 billion market by 2010. Having said that, Yipes is a relative small fry in a U.S. market led by telcos such as AT&T, Verizon Business and Qwest, as well as pure-play aggressors like Cogent. For the time being, its market slot may be that of a secondary choice for enterprises not wanting to award all their business to one carrier. Though, in a market headed for $25 billion, who'd complain?
The sideline to this story is that international carriers like Reliance are increasingly taking more than a rooting interest in the U.S. market. BT, Korea's SK Telecom and others have made the plunge, but look for more foreign players, especially from Asia, to make similar moves.
For more about the Yipes deal:
- read this article in Light Reading