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Blog 'covad' » Covad, a pioneer in broadband survives

By Dave Porter

Staff Reporter

November 6, 2003 (Axcess News) San Jose CA - Covad Communications Group (OTCBB: COVD) operates the largest national DSL network in the USA, covering more than 40 million homes and businesses. The pioneer in DSL actually reaches 45% of available users, but bleeding red ink for several years following its high-flying junk bond days that financed that reach.

With the current surge in demand for high-speed broadband you'd think COVD would be jubilant as would its shareholders, but Covad's stock has dropped more than 25% since its earnings announcement October 22.

The San Jose based company had lowered its losses to $25.1 million or 11 cents per share compared to a year ago when losses were $51.7 million or 23 cents a share.

Revenue rose to $100.5 million from $96.2 million a year before and still investors beat down its shares, having its average subscriber line revenue decline $1 to $58 and due to a higher account churn by wholesalers. Wholesalers accounted for 76% of its total revenue and the company attributed the decline and churn to special offers made by wholesalers in an attempt to win new customers. Overall, Covad's customer base increased 8% to 285,000 consumer lines and 206,000 business lines in service.

Continued @ Axcess Business News
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