Vonage narrows losses amid slowing growth

Competition from cable companies and smaller upstarts is weighing heavily on VoIP pioneer Vonage. The company, which announced its fourth quarter and year-end earnings late last week, added 166,000 new subscribers in the last quarter, down from 204,591 in the third quarter. Nevertheless, the company ended the year with a subscriber base of 2.2 million lines, a 75 percent increase over year-end 2005. Despite the new competitors, Vonage managed to improve its churn. The average monthly churn was 2.3 percent in fourth quarter, down from 2.6 percent in the third quarter.

On the revenue side, the company's fourth-quarter revenue grew to $181 million, up 91 percent from $95 million in fourth-quarter 2005. And it appears the Universal Service Fund, which became effective Oct. 1, is having an impact on Vonage earnings. The company's average revenue per line for the quarter was $28.25, up from $27.22 in the year-ago quarter. Average monthly telephony services revenue per line was $27.41 for the quarter, up from $26 per line in fourth-quarter 2005. 

For more information:
- see this release
- read this Wall Street Journal article (sub. req.)