Covad, MegaPath merge to create nationwide IP network/apps player

Covad Communications and MegaPath agreed to merge this afternoon, combining their network capabilities and managed services focus to deliver a full range of network, security and IP services to enterprises and other carriers nationwide.

The proposed merger requires regulatory approval, but the two companies claimed their combined operations would have one of the largest Ethernet, DSL and T1 delivery footprints in the U.S. – focusing on the SMB, enterprise and carrier wholesale markets, said D. Craig Young, MegaPath CEO and the new Executive Chairman of the combined businesses, in a statement announcing the deal.

Covad offers IP broadband services in more than 4,400 central offices nationwide through its commercial and wholesale distribution channels. Covad wholesale partners include leading providers such as AT&T, Verizon Business and Sprint. In recent it has been pushing hard to add value to the wholesale network business, adding nationwide MPLS service and carrier Ethernet services, among other offerings.

Meanwhile, MegaPath delivers value-added communication services, including hosted VoIP, managed security, MPLS VPNs for connecting multiple sites, and SSL VPNs for connecting remote users and business partners. MegaPath distributes its services via a large direct sales force and channel sales partnerships, and has over 19,000 direct SMB and enterprise customers. MegaPath has been driving new services lately as well, including enterprise and business offerings like bonded T1 and Ethernet-over-copper offerings as well as a focus on SMB solutions and bundles.

By combining MegaPath’s product and services focus with Covad’s national network, the clearly pair aim to deliver on the promise of using IP-based networks to delivery not only pure connectivity but services than can be consumed on a managed, or cloud-based basis.

More to come on this breaking story.