January 17, 2002 -- Covad Communications (OTCBB:COVD), a national broadband services provider utilizing DSL (Digital Subscriber Line) technology, announced operating statistics as of December 31, 2001.

-- Covad has approximately 351,000 lines in service on its network, a one percent increase from September 30, 2001 and a 28 percent increase from the 274,000 lines in service at December 31, 2000.

-- Approximately 52 percent of Covad's total lines are business lines and 48 percent are consumer or residential lines at the end of the fourth quarter compared to a business to consumer mix of 51 percent versus 49 percent at the end of 2000.

-- Covad's wholesale channel represents 96 percent of Covad's total lines while its direct channel represents four percent, which is a slight improvement from the 97 percent versus three percent wholesale to consumer mix at the end of 2000.

-- Thirteen percent of Covad's total lines are served through resellers for whom Covad recognizes revenue only when it is paid. The percentage of lines affected by these partners is unchanged from the previous quarter and is down from 33 percent of lines in service at the end of 2000.

-- For completed orders, Covad's average installation time for its business-class services averaged approximately 23 days during the fourth quarter, a 39% improvement over the fourth quarter of 2000. Its average installation time for its consumer-class services averaged approximately 11 days during the fourth quarter, a 72% improvement over the fourth quarter of 2000.

-- Cash usage for the fourth quarter was under $20 million per month, excluding bankruptcy related payments and the funding received from SBC.

-- The cash balance as of December 31, 2001 was approximately $290 million.

During the year, Covad implemented initiatives which reduced delivery times and reduced the company's cash usage quarter over quarter. Covad expects its monthly cash usage to continue to improve in the future and expects its current cash to fully fund the business through cash flow positive in the second half of 2003.

"During this recent difficult economic period, we have continued to strengthen and grow our business including improving our balance sheet by eliminating $1.4 billion in debt and raising capital to fully fund our business plan," said Charles E. Hoffman, Covad CEO and president. "We have lowered our cost structure, increased revenue and decreased losses by focusing on small business lines and have continued to manage our distressed partner lines. This quarter we also introduced new business-class services and are now better positioned to control our future as we continue to provide high quality broadband services nationwide."

-End-