SAN JOSE, Calif. -- Covad Communications Group, Inc. (OTCBB:COVD) today announced the close of the acquisition of GoBeam, Inc., a privately owned provider of Voice over Internet Protocol (VoIP) solutions to small- and medium-sized businesses. Under the terms of the agreement, Covad will issue approximately 20 million shares to GoBeam's shareholders. Covad will also provide approximately $1.5 million in cash and stock to key GoBeam employees.

    "Today marks a significant achievement in Covad history as the completion of this acquisition moves Covad from being a broadband-only operator to an integrated voice and data services provider," said Charles Hoffman, president and chief executive officer of Covad. "We now have the winning combination of our nationwide broadband network with an award-winning, market-tested Voice over IP service that accelerates the offering of our voice and data communication bundles nationwide."

    According to a report from research firm In-Stat/MDR, by 2007 the U.S. VoIP market is forecast to grow to more than five million subscribers, a five-fold increase over 2002 levels. The Internet Protocol-PBX market, which has just under 100,000 lines today, is expected to grow to more than 1.7 million lines by 2007, according to Forrester Research.

Covad Communications Inc.