Vonage lowers loss, will sell DSL via Covad

VoIP service provider Vonage reported first-quarter earnings today that were marked by higher revenue, a lower net loss and moderating growth in customer additions, but the real news today regarding the company was buried deep in the earnings announcement. Vonage is expanding its reach into the broadband market through a partnership with Covad Communications under which Vonage will offer 3 Mbps and 6 Mbps DSL service packages under the Vonage Broadband brand. Covad is a nationwide DSL wholesaler, allowing Vonage to immediately jump into the ranks of national broadband service providers. Vonage will launch Vonage Broadband by the end of the year. The implications for the broadband market at large remain to be seen, but this is shaping up as a bold move by a company that seemed to be knocked against the ropes last year by several VoIP patent lawsuits from established telcos. Pure-play VoIP players may still have limited future options, but things could get interesting if Vonage is able to re-cast itself as a full broadband service provider.

Now for the first quarter numbers: Vonage's net loss was way down from $72 million in the first quarter of 2007 to only about $9 million this year. Revenue was up 15 percent to $224.6 million, and the company added 30,000 subscribers.

For more:
- check out this coverage at Forbes
- see this press release from Vonage and Covad