US-based VoIP telephony provider Vonage yesterday reported narrowing its fourth-quarter losses for the three months ended 31 December, thanks to higher revenues and a lower cost base, but said it still faced difficult times ahead as it looks to refinance in excess of USD253 million of debt by the end of 2008. The operator confirmed it is holding talks with a number of companies concerning plans to refinance the sum owed in convertible debt, but analysts fear its task could prove difficult in today’s weak credit environment.
Revenue in the fourth quarter of 2007 rose 19% year-on-year to USD216 million, while, excluding special items, Vonage’s 4Q07 loss was USD9 million, slightly better than analysts’ forecasts. Nonetheless, the company lost USD65 million during the fourth quarter after a difficult year that saw it negotiating its way through a number of tricky patent disputes with carriers such as Verizon Communications and AT&T, and the equipment vendor Nortel Networks. Vonage cut back its advertising and reduced its expenses in 2007 and, for the first time, posted positive adjusted quarterly operating income of USD6 million, when excluding certain one-off charges. The VoIP provider added 56,000 net subscribers in the fourth quarter, bringing total customer lines to 2.6 million, it said.