Lekker Ding schreef:
Covad gets some help from Earthlink
Takes a stake in return for access
Posted on 2006-03-16 09:48:14
Covad has received a chunk of money from Earthlink in return for access to Covad equipment in eight new cities. Covad, which still loses at least 15 million a quarter on revenue of ~100 million, delays having to go back to the probably unfriendly open financial markets for new cash, and Earthlink converts 50 million into expanding a combined data and VoIP offering, (plus a small stake in Covad and some junk bonds to the same face value). press release.
The press release also suggests Covad could use some of the money to provide ADSL2.
commentary: Covad, almost the only survivor from the US telecom bubble, is obviously still struggling to find a niche. With flat revenues it is hard to see how they can go it alone. The ideal end for Covad is to be bought out entirely - perhaps by a cable operator wanting to hedge their technology bet, or more likely by Earthlink themselves which, with over 5 million subscribers, actually makes money each quarter but needs to keeping growing basic infrastructure in order to avoid being pushed around by telcos.