Covad to offer Vonage Broadband

May 8, 2008
VonageVonage and Covad Communications today announced a strategic relationship which will enable Vonage to provide its customers with a broadband solution using Covad’s nationwide DSL network. The new service, called Vonage Broadband, is expected to be offered to new and existing customers by the end of the year.

This is interesting, since Covad's strength has always been in offering business VoIP services not residential. Though, I should point out that in 2004, Covad said they were jumping in to the residential VoIP business. Pal Jon Arnold was even quoted as saying in a CNET article that it was no surprise and "Everybody's trying to jump on the bandwagon," Arnold said. "Every ISP is looking to get into voice and (to) do it before their customers are lost to others." Well, I have a surprise for you. How many people knew Covad offered residential VoIP starting back in 2004? Anyone? [crickets chirping]

So it should come as no surprise that it makes sense for Covad to partner with Vonage. By joining forces with Vonage, Covad and Vonage will offer DSL services with maximum download speeds of 3.0 or 6.0 megabits per second to both residential and small business customers, along with bundled voice over IP services.

According to the news, Jeffrey Citron was quoted as follows:
“Consistent with our strategy of focusing on the customer, Vonage Broadband enables us to respond to the demand we hear from customers who prefer the Vonage brand,” said Jeffrey Citron, Chairman, Chief Strategist, and Interim CEO. “In addition, it provides us with a competitive offering that continues to give customers the freedom of choice.”

In related news, Vonage today reported a first-quarter net loss of $9 million, or 6 cents a share. Vonage reported a narrower first-quarter loss after cutting marketing spending, (less Vonage woo hoo commercials?) but customer growth slowed as a result. Vonage said it added 30,000 net subscriber lines in the quarter. The previous quarter was 56,000 and Vonage added a whopping 166,000 in the year-ago quarter. It's monthly customer churn, or cancellations, rose to 3.3 percent from 3.0 percent in the previous quarter. Revenue rose 15% to $224.6 million, which isn't too shabby.

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