Both Covad Communications and Qwest Communications announced national voice-over-IP rollouts last week, and while neither was a surprise, they collectively represent more options for smaller business customers and more competition in an already-dense market.

Both carriers are targeting small to mid-sized businesses with VoIP offerings that enable companies to eliminate on-premises equipment or use VoIP in conjunction with existing gear.

“Small businesses are more driven by price and may be willing to put up with a bit of inconvenience,” said Jon Arnold, analyst with Frost & Sullivan. “Covad has a pretty good quality network and can provide good quality of service for voice. Qwest operates in some smaller states [as a local carrier] and will have a natural affinity for smaller to mid-sized businesses, but they can go after the big guys because they do have a known name.”

Covad says it now serves 125 markets, covering more than 900 cities. Qwest announced 100 major markets.

The VoIP market is getting crowded, Arnold said, and will only grow more so in a few months when major cable operators are expected to target residential customers with their VoIP offerings.