Covad and MegaPath: Merging Managed Services, Broadband

IP broadband services provider Covad and communication service firm MegaPath have announced their intent to merge to provide a complete suite of managed services to customers worldwide over what is purportedly America’s largest broadband footprint. Here’s the scoop.

Here’s what each company brings to the table: Covad offers broadband from over 4,400 central offices and through wholesale partners like AT&T, Verizon Business, and Sprint; while MegaPath delivers hosted VoIP, managed security, VPNs, and essentially anything else that could fall under the umbrella of managed services.

MegaPath distributes its services through channel and direct sales both, and they claim to have over 19,000 SMB and enterprise customers. If you combine that already-impressive number with the new customers MegaPath can reach through Covad’s infrastructure, the logic for the merger becomes clear.

The merger is, of course, pending government approval, though the press release indicates Covad and MegaPath intend to close the deal by Q3 2010. Neither company has disclosed the financial component of the deal, but they would have you believe that this is a major channel move -- and since they're indicating that the combined company will be in acquisition mode, I'm sure we'll be hearing more soon.

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