Vonage IPO shows VoIP moving to mainstream

Vonage Holdings Tuesday priced its initial public stock offering at $17 per share, a sign VoIP technology is moving more quickly into the mainstream.

The stock price came out in the midrange of its initial target, which is noteworthy because the offering comes at a time global stock markets are reeling due to inflation fears, high oil prices and other worries. The strong showing is a sign VoIP is moving more quickly into the mainstream as it appeals to a wider range of people.

Vonage priced 31.25 million shares, raising over $531 million in the IPO. The issue begins trading Wednesday under the stock ticker "VG."

The company allows residential and small business customers to make unlimited domestic calls for a fixed monthly fee, using IP technology to make calls over broadband connections. Competitors such as Skype offer free calling from PC to PC, or low rates from PCs to fixed line telephones or vice-versa.

Vonage's heavy marketing has garnered the company over 1.6 million subscribers, but also considerable debt that made investors wary of the IPO. It also competes with a number of larger rivals financially better able to wage a protracted battle in the VoIP space, such as Skype.

The IDG News Service is a Network World affiliate.