Vonage Holdings' subscriber growth nearly ground to a halt in the second quarter, as the internet telephone company said it gained just 2,000 lines in the period.

CFO Marc Lefar said the company made some progress in keeping its existing customers, but a pullback in TV advertising led to lower recruitment of new customers.

The company had underestimated, he said, how much traffic the TV advertisements were driving to its web site and other recruitment channels.

Vonage posted a quarterly loss of $6.9 million compared with a loss of $23.2 million in the same period a year ago.

Sales were $228 million, up 11% from last year.

The company was a pioneer in internet telephone service, supplying customers with adapters that let them plug their home phones into their broadband connections.

It added hundreds of thousands of customers per quarter as recently as two years ago, but growth tapered off as Vonage battled patent lawsuits and faced growing competition from similar services provided by cable companies.

The Holmdel, N.J.-based company ended June with 2.6 million subscribers, up from nearly 2.5 million a year before.

Churn, or the percentage of customers leaving each month, was at 3%, down from 3.3% in the first quarter but up from 2.5% in the second quarter last year.

The company has been trying to improve customer service, in part by increasing training for its support personnel and introducing new adapters.

Source:AP News