Covad Targets B2B VoIP

Cable operators looking to provide voice-over-Internet-protocol services to small- and medium-sized businesses will face competition beyond the regional Bell operating companies.

Competitive broadband provider Covad Communications Group plans to enter as many as 100 markets later this year with a VoIP offering via its digital subscriber line platform.

“We can offer an integrated voice and data package,” said Covad president and CEO Charles Hoffman, who views the company’s nationwide backbone network, with more than 2,000 local DSLAMs (DSL-access multiplexers) serving its 515,000 DSL customers, giving it a leg up on the competition.

“The Bells and cable are regional,” he continued, noting that Covad can offer nationwide coverage, allowing businesses to connect offices across the country with one VoIP network. “And we can control quality of service, unlike Vonage and AT&T.”

Covad’s recent acquisition of VoIP-provider GoBeam Inc. will allow the company to introduce the service to 100 markets by year’s end. GoBeam has deployed two soft switches for its nationwide network and counts several hundred subscribers in Los Angeles, San Francisco and Chicago.

Covad said that while 68% of its subscribers are residential users, a similar percentage of its revenue comes from its business DSL customers. Covad plans to build off that base, targeting many of its current DSL business subscribers for VoIP services that would be cheaper that traditional phone alternatives.

Like cable, Covad believes it will be relatively easy to add VoIP to a DSL offering. “We’re all automated,” Hoffman said. “The provisioning is electronic.”

The company plans to market to businesses that may have as few as two employees or as many as 40 or more. “We will launch a SOHO [small office, home office] product in October,” Hoffman said.

Covad executives believe companies can save 20% to 40% off their current circuit-switched telephony costs by going with VoIP. It plans to set up sales channels in local markets using resellers and system integrators, as well as its own local sales managers.