Covad Targets SMBs with VoIP Services

Calling broadband telephony a "natural extension" of its infrastructure, Covad Communications will introduce voice over Internet protocol (VoIP) service in four markets by October as the first step in a national rollout.

Initially, three products will be sold for businesses: basic voice; small office/home office voice; and a hosted private branch exchange PBX (PBX), dubbed virtual VoIP.

All include unlimited local calling, with either bundled domestic long-distance minutes, or unlimited domestic long-distance calling, and support inbound toll-free calling, local number portability, emergency 911 and directory assistance.

The products will be bundled with Covad's broadband Internet access, Web hosting, and business e-mail hosting services in an effort to win and retain customers amid cutthroat competition with telecom carriers and cable operators.

"We will focus on the addition of new customers," said Steve Lail, Covad vice president of voice deployment. Covad is staying mum so far on which markets it has targeted for the initial rollout.

Covad has been developing its VoIP plan for nine months, after testing the technology in late 2002 and 2003, Lail said. The company chose to target business customers first because it believes its symmetric digital subscriber line (SDSL) technology gives it an advantage over rival DSL services, because it supports the same data rates for upstream and downstream voice and data traffic.

The company, which also conducts business with other service providers who put their own brand on Covad's service, will also provide VoIP services wholesale.

Consumer service is expected to be rolled out shortly after the business push. Pricing has not yet been set, although Lail said the Covad "certainly understand(s) the pricing dynamics."

Current VoIP consumer offerings charge between $35 and $60 for unlimited local and long-distance services. Lail said the company is mapping its marketing plan to support the VoIP rollout.

As the number of broadband users increases nationwide (a high-speed Internet connection is required for VoIP) and U.S. federal regulators have signaled their willingness to take a hands-off approach, competition is heating up.

Telecommunications companies such as Verizon and AT&T and cable operators Time Warner Cable and Comcast are among those putting VoIP plans in place. A number of smaller firms, such as Vonage are also gaining the attention of small businesses and investors as well.

Adapted from internetnews.com.