Vonage Holdings, the VoIP group that went public in May, on Tuesday posted a wider second-quarter loss as revenue missed analysts’ estimates because of customer defections.

The company’s net loss increased to $74.1m, or $1.16 a share, from $63.6m a year earlier. Vonage said it had 1.85m lines at the end of the second quarter, up from 1.6m three months earlier.

Buoyed by extensive TV advertising, revenues more than doubled to $143m but still missed analysts’ predictions. Vonage, whose stock plunged in the immediate wake of its flotation, said full-year sales would also miss analysts’ estimates.

Vonage boosted total marketing spending by 46 per cent in the latest quarter in an effort to keep customers. For each added subscriber, the company spent $239 on marketing, up from $236 a year earlier.

The company also revealed that its customer turnover rate, or churn, rose to 2.3 per cent from 2.1 per cent in the first quarter, while average revenue per line rose 4 per cent to $27.70 as customers signed up for its premium calling plans.

Vonage pioneered VoIP services in the US with cut-price call packages costing as little as $15 a month for 500 minutes but has faced a growing challenge from bigger competitors including cable operators such as Comcast and Time Warner as well as traditional telecoms carriers such as AT&T.

On Tuesday, Vonage shares fell by 5.5 per cent to $6.70, bringing the decline since the company’s initial public offering to more than 60 per cent. The shares were valued at $17 each at the IPO but soon after the shares fell, some customers baulked at paying for shares they had committed to buy.

The company said it still intended to collect payment from these investors but revealed it had paid $17.9m to underwriters as compensation. The company said it had bought $11.7m worth of its own stock to meet its obligations to the IPO underwriters and would reimburse another $6.2m to cover underwriter costs.

The share sale has also sparked at least nine lawsuits, with some investors alleging Vonage failed to disclose certain risks.

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