Zylog lines up Rs 200cr

Zylog Systems India Limited, a wholly-owned subsidiary of Chenna-based Zylog Systems Limited, is planning to invest around Rs 200 crore in setting up infrastructure to support its wireless internet service – Wi5 – over the next two years.

Speaking to reporters after launching ‘Wi5’ here on Sunday, R Janakiraman, COO, Zylog Systems India Limited, said the company will roll out the service in Bangalore, Delhi, Mumbai, Hyderabad, Kolkata and Pune by mid 2010. Around Rs 84 crore will be invested in Phase-I to create the infrastructure. The company targets Rs 500 crore in revenues in the next five years through the service.

The wireless service of Zylog is provided by creating a mesh network of nodes that are kept in roof tops. The pre-paid connection, priced between Rs 1,000 and Rs 1,750 a month for options like 1 mbps (mega bytes per second), 2 mbps and 4mbps, is accessible by any Wi-Fi-enabled devices.

The company will initially target the DSL (digital subscriber line) customers. There will be a 5 to 7 per cent of migration from the segment and after geographical expansion. The company is also targeting data card customers, the segment which has a market share of 12 per cent, he added.

The overall Indian Wi-Fi market, according to Janakiraman, is set to to exceed $744 million (around Rs 3,720 crore) by 2012 from the current $41.57 million (around Rs 207.85 crore).

The company will also lease its infrastructure and expand overseas, especially in the developing countries, after the complete roll out of the service in India,  said Ram Sesharathnam, managing director and chief executive officer, of Zylog systems.

On the parent company, he added that it will acquire two medium-sized European companies in e-governance and management space by the end of this year, while he refused to divulge further details. The investment for the acquisitions will be around $12 million (around 60 crore).