Covad boosts VoIP, DSL counts

In its third quarter earning results, Covad Communications de-emphasized financial metrics that remained generally weak, in favor of discussing more upbeat news having to do with the numbers of VoIP and DSL customers it added.

Charles Hoffman, president and CEO of Covad, said the service provider added 62 customers for its small business VoIP service, giving Covad a total of 373 customers and connections to 17,900 end user stations. While that doesn’t sound too heady, this was Covad’s first quarter of reporting revenue for the new service, Hoffman said.

"We’ve also got almost 100 new customers in the pipeline [under contract]," he said.

"VoIP represents the next phase of our business plan."

During the quarter, Covad recorded $2.2 million in VoIP revenue, and expanded its business service to 46 markets. The service will be nationwide by the end of the year.

There also has been speculation that Covad is nearing the launch of a residential voice offering using VoIP line cards for its DSLAMs. In addition to a widely reported test of Nokia’s line card, Hoffman said during the earnings call that Covad also is testing a solution from Samsung, another of its current vendors.

Regarding DSL, Covad reported the addition of 10,500 lines during the third quarter, after reporting a 1000-line decrease in the previous quarter. The company now has 524,900 lines in service.

Among other numbers, Covad reported a net loss of $13.8 million, much narrower than the $33.4 net loss it posted in the third quarter of 2003, but larger than the $7.4 million loss it recorded in the second quarter this year.

Revenue, at $105.7 million, also was up slightly from the same quarter last year, but lower than the $107.3 million figure reported for the second quarter of 2004.

In other news Hoffman said Covad is pursuing a WiMAX trial in the San Francisco Bay Area, and hopes to offer commercial broadband wireless service sometime in 2005.