Covad Vonage Deal Redux

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Covad Vonage Deal Redux

VonageI was emailing industry analyst Jon Arnold about some things and mentioned I quoted him in my post this morning about the Covad & Vonage partnership and the resulting product offering called/branded "Vonage Broadband" and soon to be carried by Covad.

He wrote back with some interesting insights of his own regarding the deal and wonders if it's a good move or one of desperation. That thought had crossed my mind as well and I nearly blogged as such in my earlier post.

Jon mentioned he would like to blog about this deal, but he's pretty busy. Nevertheless, he provided me via email some of his initial thoughts that I thought were worth sharing:

Really concerned about their rising churn - not good. Interesting move with Covad. Their new owners probably see that the biz market is a touch slog, and even though the rez market is even tougher, their network can help make Vonage's offering stronger, at least in terms quality and maybe some bundling scenarios. Both companies are struggling, so you can read this either as a good move or a desperation move. VoIP companies are failing left and right these days, so am sure it's a bit of both.


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