Covad buys NextWeb California's largest fixed-wireless provider

\nThis morning, Covad Communications Group announced the closing of its acquisition of NextWeb, California’s largest fixed-wireless broadband provider for business.

This wireless connectivity helps augment Covad’s existing wireline broadband and VoIP capabilities and can also reduce the company’s dependence on the Bell companies. Covad will issue approximately 16 million shares of stock and pay approximately \$3.9 million in cash for NextWeb.

I should point out that one WiMAX base station can serve a five-mile radius and the first WiMAX certified equipment is expected will be available later this year. Covad has been trialing “pre-WiMAX” equipment in the Bay Area for some time now. NextWeb has used its pre-WiMAX network to reach 3,000 business customers, with revenues of \$10 million last year making NextWeb a "profitable WiMAX operation".

According to Covad, "There are a number of interesting aspects to wireless broadband. It allows Covad to provide much higher bandwidth products to its customers and it takes much less time to set up a new customer. Wireless also expands Covad’s footprint--that five-mile radius for WiMAX is nearly six times the service area of DSL and three times the service area of a T1. This means customers who before were outside the reach of business-class broadband because of the vagaries of CO positioning can now purchase fixed wireless."

It will be an interesting year for WiMAX that is for sure!