Vonage Teams With Covad to Offer DSL

Troubled VoIP operator has announced a partnership with Covad to offer DSL to residential and small business customers.

VoIP operator Vonage has announced a new partnership with broadband provider Covad to offer residential and small business customers 3—6 Mbps DSL service under a new package called Vonage Broadband. The service will run on Covad’s nationwide DSL network, and enable Vonage to offer a “double-play” package of VoIP phone service and broadband Internet access in a single plan.

“Consistent with our strategy of focusing on the customer, Vonage Broadband enables us to respond to the demand we hear from customers who prefer the Vonage brand,” said Vonage’s interim CEO Jeffrey Citron, in a statement. “In addition, it provides us with a competitive offering that continues to give customers the freedom of choice.”

Vonage currently claims over 2.5 million subscribers to its VoIP service; the company has been on a rocky path, first rolling out a much-hyped IPO in 2006 then seeing its value plummet—and almost seeing its network shut off—in the face of patent lawsuits from AT&T, Verizon, Sprint, Nortel. Vonage just reported a first-quarter loss of $8.9 million, and says it signed up a net 30,000 new subscribers during the quarter, down from 56,000 in the previous quarter and over 160,000 in the same quarter a year ago. Overall the company continues to lose customers, with reports putting Vonage’s month subscriber “churn” rate at about 3.3 percent per month. However, the company hopes the new broadband bundling deal—and a renewed advertising push—will enable it to re-grow its subscriber base.