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April 05, 2010

Covad, MegaPath Merger: "The Right Move"

By Stefania Viscusi, Assignment Desk Editor

The recent announcement of a merger between Covad Communications, a national provider of IP broadband services, and MegaPath (News - Alert) Inc., a managed IP data, voice and security services provider, will create one of the largest Ethernet, DSL, and T1 footprints in North America.

In addition, the merger will create the only MSLEC capable of providing a full range of Internet, voice, security and VPN services nationwide.

D. Craig Young, MegaPath CEO and new executive chairman of the combined businesses, said in statement, “By leveraging the strengths of each company, we will provide customers and partners with expanded expertise, broader innovative services and a powerful network that simplifies the way they communicate and conduct business online.”

To find out more about what industry insiders think this announcement signifies for the larger VoIP marketplace, I caught up with officials from DIDX, freeSWITCH and Jaymie Scotto & Associates.

Ilissa Miller, managing partner of Jaymie Scotto & Associatessaid this was “the right move for both companies,” as it creates an interesting company that will provide an enhanced full suite of comprehensive services to the enterprisemarket. 

“Covad immediately expands its product portfolio while MegaPath gains direct access to a network infrastructure that enables it to further expand its services, obtain greater network control and reduced costs - allowing the company to remain competitive to its end user enterprise market,” Miller said.

“I am interested to see how quickly the companies integrate, as that usually is the issue with mergers of this caliber, for instance, when Global Telecom & Technology“GTT” acquired WBS Connect (News - Alert) in December 2009 - the companies were fully integrated within a month. '

Other examples of recent mash-ups, according to Suzanne Bowen, vice president of Super Technologies (News - Alert) and DIDX include, “O2/Telefónica and Jajah, Google and Sipphone's Gizmo5, Sabsebolo and Jaxtr, Cisco and Tandberg, Bharti Airtel (News - Alert) and Zain Telecom's Africa operations, as well as initial public offerings like Broadsoft,” Bowen said.

“These mergers and acquisitions in the IP communications marketplace help the “best of the best” to mash up their next-gen products and services,” Bowen said.

In addition, “some of these are, or have been, taking advantage of the DIDXchange (News - Alert) which is really exciting to us,” Bowen noted.

Also, Brian West of the FreeSWITCH project said this move is an exciting one for smaller enterprises.

“Many of these smaller providers won't be able to compete unless they reach a certain size,” West said.

“We would rather see two small providers each with innovative services join forces to create a more competitive entity than have those same two providers be swallowed up by one of the giant incumbents.'


For more, check out the DID/DDIchannel on TMCnet.

Stefania Viscusi is an assignment editor for TMCnet, covering voice and Voice over IP technologies. She also oversees production of TMCnet's e-Newsletters in the areas of Internet telephony and speech technology. To read more of Stefania's articles, please visit her columnist page.

Edited by Stefania Viscusi

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