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Covad Bundles Voice and Data

As the telecom winter drags on, more and more carriers are trying to distinguish themselves with cheaper, more convenient bundled services.

The latest carrier to join the bundled party is recently bankruptcy-absolved Covad Communications Inc. (OTC: COVD). The company announced today that it is offering bundled voice and data, a service titled TeleXchange, in the San Francisco Bay area (see Covad Bundles Services).

The company says that TeleXchange will provide up to 24 full-featured phone lines and a high-speed connection to the Internet over a single digital subscriber line (DSL) connection. Both services will be billed on the same statement, and the company will offer customer support for both voice and data over one 24/7-serviced phone number.

"This sounds very promising," says i2 Partners LLC analyst Andrei Jezierski. "We believe that the whole bundled thing is a done deal."

This is certainly big news for Covad. Unlike many of the larger service providers announcing bundled services these days, the company, which reemerged from bankruptcy last December, has never offered voice services before (see Covad Reorg OK'd). It plans to take advantage of its expertise as a DSL provider and offer voice services over a DSL connection.

Covad claims that the ATM technology in its backbone network will ensure that the sound quality in its voice services is equal to that of standard telephone services. Voice services will be carried over Covad's data network before being connected to the public telephone network.

The voice service includes unlimited local calling with bundles of long-distance minutes, access to directory and operator services, and such features as caller ID, call waiting, and three-way calling at no extra charge, the company says.

As for data services, Covad will offer customers high-speed Internet access with business ISP options like business email, flexible IP address options, web hosting, and custom domain services. At the moment, TeleXchange is DSL-based, but Covad says it expects a T1 option to be added sometime next year. The company also expects to expand the customizability of its bundled offering and to launch its TeleSOHO service for small businesses and home offices next year.

"What’s great about VoDSL is that it allows Covad to leverage its own DSL network to provide voice service,” says Todd Kiehn, group manager at Covad. “The only additional upgrades are installing VoDSL hardware in the central offices.” Covad has 90 central offices throughout the Bay area.

The company has signed an agreement with Focal Communications to provide the voice service network for TeleXchange. Focal owns its own national network, services 23 metro markets, and, according to Covad, is not dependent on purchasing wholesale services from the regional Bells. Focal had not returned requests for comment by press time.

This means minimal risk and capital outlay for Covad, according to Infonetics Research Inc. analyst Kevin Mitchell. "They’re relying on another carrier, so this is not important in terms of big capex spends," he says. "It will really be up to Focal to invest if Covad is successful."

However, Mitchell cautions that success may not be imminent, pointing out that many companies may be wary of moving to a new and less-reliable technology. "Business customers have to be aware of the reliability issue," he says. "If there’s a power cut, there will be a service cut."

"Nothing can match the quality and reliability of a traditional PSTN line," i2's Jezierski agrees. "Psychologically, at least, I think there will be some concerns." However, he continues, "If [the technology] does work, it certainly improves the economics of the offer."

Covad's Kiehn says he's not worried that the voice services won’t be up to par. "Covad is confident that the service will be reliable and is providing the service-level agreements to back it," he says.

Since reorganizing, Covad has focused on getting the basic services right and offering them cheap. The carrier says that customers switching to its new service bundle can expect to save as much as 40 percent on their monthly phone and Internet service bills.

The bundled service package will initially be available only in the San Francisco Bay area, but the carrier says it expects to expand geographically into 10 to 15 additional markets next year.

— Eugénie Larson, Reporter, Light Reading
lightpimp 12/4/2012 | 9:10:41 PM
re: Covad Bundles Voice and Data Almost every VoDSL company has died already. Except Paradyne who aqcuired JetStream and CopperCom. Both trunk VoATM. Any Clues?
joestudz 12/4/2012 | 9:10:39 PM
re: Covad Bundles Voice and Data Not sure whoes equipment Covad is using or plans to use, but take a look at MRVC. Their Optical Access Division won an award earlier this year for their VDSL product offering.
runrabbitrun 12/4/2012 | 9:10:38 PM
re: Covad Bundles Voice and Data My guess is they (Covad) are outsourcing the whole VoIP part. Focal uses a DMS-500 in the core and has some IAD product offerings to do the conversion at the customer prem.

Interesting to note that Focal had about 50% more disconnects then adds in 3Q. This should send out a warning flag. Does any one know why this occured?
Kevin Mitchell 12/4/2012 | 9:10:35 PM
re: Covad Bundles Voice and Data Focal uses General Bandwidth gateways for their VoDSL offering. Covad is using Focal's wholesale VoDSL service. If need be, Covad will backhaul the VoDSL traffic on their ATM network to a POP with the GB gateway. Covad uses Efficient IADs at the customer premises at this time.
kidcryptic 12/4/2012 | 9:10:30 PM
re: Covad Bundles Voice and Data Which DSLAM vendor is Covad using? The gear they rolled out in their network earlier in their deployment would not be upgradable to support voice and data traffic with sufficient QoS. Are they upgrading the whole lot or just doing selective rollouts?

Any insights from the peanut gallery...

Kidcryptic
Kevin Mitchell 12/4/2012 | 9:10:15 PM
re: Covad Bundles Voice and Data I believe that to be Nokia. No upgrades for them.
willywilson 12/4/2012 | 9:10:14 PM
re: Covad Bundles Voice and Data I might as well be the first ...

I commented in haste. Last year's announcement was of T-1 *data* services, not T-1 *voice* services. As for whether the voice element is VoIP or not, that kind of depends on the definition.

They might be encoding it in IP between the customer and the Nortel switch, at which point it gets converted back into PCM. It's still a big nothing, but the critic ought to have all of his facts straight.
willywilson 12/4/2012 | 9:10:14 PM
re: Covad Bundles Voice and Data 1. The company announced today that it is offering bundled voice and data, a service titled TeleXchange, in the San Francisco Bay area (see Covad Bundles Services ). The company says that TeleXchange will provide up to 24 full-featured phone lines and a high-speed connection to the Internet over a single digital subscriber line (DSL) connection.

2. "This sounds very promising," says i2 Partners LLC analyst Andrei Jezierski. "We believe that the whole bundled thing is a done deal."

3. This is certainly big news for Covad.

4. Unlike many of the larger service providers announcing bundled services these days, the company, which reemerged from bankruptcy last December, has never offered voice services before (see Covad Reorg OK'd ). It plans to take advantage of its expertise as a DSL provider and offer voice services over a DSL connection.

5. Covad claims that the ATM technology in its backbone network will ensure that the sound quality in its voice services is equal to that of standard telephone services. Voice services will be carried over Covad's data network before being connected to the public telephone network.

6. TeleXchange is DSL-based, but Covad says it expects a T1 option to be added sometime next year. The company also expects to expand the customizability of its bundled offering and to launch its TeleSOHO service for small businesses and home offices next year.

7. The company has signed an agreement with Focal Communications to provide the voice service network for TeleXchange.

8. This means minimal risk and capital outlay for Covad, according to Infonetics Research Inc. analyst Kevin Mitchell. "TheyGÇÖre relying on another carrier, so this is not important in terms of big capex spends," he says. "It will really be up to Focal to invest if Covad is successful."

9. The bundled service package will initially be available only in the San Francisco Bay area, but the carrier says it expects to expand geographically into 10 to 15 additional markets next year.

---------

Oh is this a doozy.

1. Hmm. It wouldn't be anything like TeleXtend, which they announced a year ago, would it?

http://www.covad.com/companyin...

2. I'm sure that's a completely independent opinion, too!

3. Or maybe a re-launch of what they tried to do a year ago themselves, and now are doing again but this time as a reseller of another CLEC's services, which themselves have a big resale component?

4. That's just not true. They announced it a year ago, anyway.

5. Focal Communications is providing the offering, and it's not VoIP. It's running through Nortel voice switches.

6. There is NO distinction between "T-1" and "DSL." All "T-1" services that are provided over copper are transported by a DSL techngology, usually 2B1Q but incresingly TC-PAM.

7. Hey, I bet Convad's making a mint off this ... NOT!!

8. Except the risk of making another announcement that comes to nothing.

9. Funny, that's what they said a year ago.

Come on, Light Reading, couldn't your reporter click to at least a couple of web sites to check it out, or are you completely a press release distribution service these days?
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