Covad Set To Emerge From Bankruptcy

powerlord writes "All of us still rooting for Covad can let out that deep breath we've been holding. According to an article on the Seatle IP Wire Covad is set to emerge from bankrupcy. They claim they've managed to shed most of their debts and are concentrating on 50 major metropolitan areas right now. They expect 40 of the markets to be cash positive by year end, with the entire company cash positive by mid 2003. Their stock rose $0.75 to $1.39."

Comments

Congrats, but

[Erasei]

I worked with a company that partnered with Covad a few years ago. With any past partner, you wish them the best, and hope they do well as a company.

But the reason (well, one of the many) reasons they went bankrupt in the first place was the old problem known as 'the last mile'. In the DSL world, the telco still has to be involved. So, how can a company like Covad, basically a reseller, expect to survive against the telco selling DSL themselves?

Reselling CAN be profitable.

[Tsar]

So, how can a company like Covad, basically a reseller, expect to survive against the telco selling DSL themselves?
One word—volume.

All kidding (well, most kidding) aside, I recently saw an article referenced on DSLReports that makes an excellent point—in general, DSL customer service sucks. Installation can be time-consuming without a guarantee of eventual success, service is occasionally spotty, and online help can be hit-or-miss. Work-at-home folk who depend on their broadband for their livelihood, as well as those of us who are just willing to pay a bit extra for good service, would likely do business with a reseller who would wrap a telco's DSL line in better support for a slightly higher monthly fee.

On the other end of the spectrum, a reseller could purchase DSL service wholesale and provide stripped-down service (no email, Usenet, or toll-free support) for less than the full-service products offered by the telco. Many of us geeks would go ga-ga for such a service, especially if all extra services (such as static IP's) were offered a la carte.

Proud owner of a self-restored 1968 Ford Fairlane, 302 V8, 9" 4.11 geared...
Self-restored? Wasn't this the setup for a Stephen King novel?

Learned their lesson?

[YouAreFatMan]

"Covad said it has learned from the past and will not expand until it can afford it."

And it took how long and how much wasted money to realize a principle that a 8 year-old with a lemonade stand has figured out?

On the plus side for Covad, they managed to outlast their competition both on the DSL side (Northpoint, Rythms) and cable (Excite), so they've got the opportunity for a bigger share of the pie, and a better chance of staying afloat.