Vonage Testing IPO Waters

Voice-over-Internet-protocol phone company Vonage Holdings Corp. is reportedly getting ready to attempt an initial public offering, aimed at raising $400 million-$600 million.

According to reports in The Wall Street Journal and the Daily Deal, Vonage — the largest IP phone-service provider, with about 800,000 customers — is expected to file documents with the Securities and Exchange Commission within the next six weeks.

According to the Daily Deal, which broke the story, Vonage could pursue a dual-track process, which would allow it to seek out a merger with another company as well as an IPO. According to the Deal, if Vonage elects to go the IPO route, it would use the money to expand its network in the U.S., Canada and overseas.

Vonage has raised more than $300 million in venture-capital funding in the past two years. In May, it raised about $200 million from Bain Capital and in August 2004, it raised $105 million in a round of funding led by New Enterprise Associates.

According to the Deal, underwriters for the IPO are expected to be Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and UBS Investment Bank.

Vonage spokesman Mitchell Slepian declined to comment on the reports.

By expanding its reach, Edison, N.J.-based Vonage could pose some additional headaches for cable operators beginning to launch their own VoIP products. It two biggest competitors are Time Warner Cable (which has about 600,000 VoIP customers) and Cablevision Systems Corp. (with 500,000 VoIP subscribers).