Information Technology solutions company Zylog Systems announced the launch of its wireless broadband service Wi5 in Chennai on Sunday. The company plans to invest Rs 200 crore over the next two years to promote the new service across India.

It has created a separate division Zylog India for the business. The company expects about 100,000 subscribers in the first year. The launch also spells the first step of diversification for the company, said S Rajagopal, director of Zylog. The company has entered the internet service provider (ISP) business with a category A licence to operate in all the telecom circles. The service will be available in metros including Delhi, Mumbai, Hyderabad, Bangalore and Kolkata in the near future, he added. It is presently available in select pockets of Chennai including Adyar, Besant Nagar and T Nagar.

Ramanujam Sesharath-nam, managing director and chief operating officer of Zylog, said, “With the new services operational, we are expecting revenue of Rs 500 crore over the next five years from this business. With 250 Wi5-enabled nodes already installed across the city, 4,000 more nodes will be operational in Chennai over the next 12 to 15 months. We expect to complete the citywide Wi5 project by the middle of 2010.”

Zylog has been operating in the telecom vertical for the past eight years and the services that were offered to enterprises have now been

extended to consumers, he added. The company has arrangements with all major service providers for bandwidth and Wi5 will reduce the problems of last-mile connectivity, he said. The company has launched three monthly plans priced at Rs 550 [one megabit per second (Mbps)], Rs 1,000 (two Mbps) and Rs 1,750 (four Mbps). Subscribers can opt for the service and pay through the internet (Zylog Wi5 portal) or through the company’s distributors employed in the select locations where service is available.

The overall Indian Wi-Fi market is expected to be $744 million by 2012 from the present $41.57 million growing at over 60 per cent every year [including wireless local area networking (WLAN) hardware, systems integration and software services, not including embedded devices and laptops].