Covad Communications was named the market leader among hosted VoIP providers for business by In-Stat, an independent research group, in a just-released report entitled, “Steady Growth Ahead for Hosted VoIP Solutions.” Covad’s 28 percent market share led all providers targeting business customers, including MCI, SBC, PingTone, M5 and others.

This report demonstrates the tremendous potential of the hosted VoIP market,” said David Lemelin, In-Stat senior analyst and the author of the report. “The primary drivers for this growing demand are both cost savings and the enhanced feature sets available from VoIP applications.”

In the hosted VoIP model, the customer does not have to purchase and maintain an on-site PBX. Instead, the provider “hosts” the equipment and offers high-speed Internet access, local and long-distance calling, and many advanced calling features like “find me, follow me” and “visual voice mail.”

“The net effect is a much more comprehensive voice and data solution than a typical small or medium sized business would otherwise be able to afford or use. They get the benefits of big company communications capabilities without the cost and complexity,” said Gaines, Covad’s SVP, Field Sales.

Covad offers two hosted VoIP alternatives. Covad VoIP vPBX voice service delivers feature-rich, integrated local, long distance, and high-speed Internet access communications all over one fully managed network connection. Covad VoIP PBXi Voice Service offers the benefits of VoIP to businesses that want to retain their existing on-premise phone systems.

In-Stat’s report projects that the market for hosted VoIP services will grow more than ten-fold over the next four years to $1.27 billion by 2009.