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Rumor: Best Buy Looking At Covad?

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[qi:011] Best Buy (BBY), the large North American electronics retail chain, that recently snapped up Speakeasy, a DSL provider, is now interested in gobbling up Covad (DVW), a large wholesale broadband provider, according to Broadband Reports.

The discussions have a on-again-off-again nature, Broadband Reports says, and points out that the deal might be for Covad’s VoIP business. Covad which trades on American Stock Exchange for about 65 cents a share is valued at $194 million compared with $97 million Best Buy paid for Speakeasy. I have contacted Covad and am waiting to hear what they have to say.


If Covad is indeed in plan, then it could get some interest from the likes of AT&T (T), Qwest (Q), and Embarq (EQ). It currently has a line sharing agreement with AT&T. They are also one of the first to provide ADSL2+ in the US.

12 Responses to “Rumor: Best Buy Looking At Covad?”

  1. Well, I’m not entirely surprised after BBY’s purchase of Speakeasy. And I also don’t blame them for wanting to broaden their revenue (Wal-Mart should have started doing this years ago). I actually found an interesting article on the blog NewsVisual on this supposed deal. Since the negotiations are rumored to be on-again, off-again, NewsVisual went ahead and looked for corporate ties that may be the starting points for these initial negotiations. According to their research, BBY does have corporate ties to Covad.

  2. This is great news is you are a BBY shareholder. Buying into Covad you’re getting a residual revenue stream and can start selling more hardware (i.e IP Phones).

    The biggest challenge for BBY would be who would run the busines….. The Telecom business is very different than retail.

  3. More power to them. I’ve had covad service for the last 7 years with steadily declining service the last year plus. On my last tech support call, I mentioned perhaps it would be easier to switch to Qwest. The guy said maybe, so I did.

  4. thingslikerobots

    Covad’s “VoIP Business” it not geared toward the residential/consumer, it as an SMB play, usally delivered via a Cisco IAD.

    This would seem an odd acquisition unless BestBuy is going to try to make a push into the SMB market and wants to leverage them to get into business class services.

    CDW is doing similar things I believe in partnership with to sell things like T1’s, PRI,s, SIP trunking and hosted, IP centrex services.

  5. Glenn Fleishman

    Covad used to be and may still be the primary way that Speakeasy handled DSL installations, too. Covad stopped selling to consumers some time ago. In most cases, Covad acts as the interface to the local ILEC, and Speakeasy acts as the billing front end and facilitator.