Internet telephony provider Vonage is pushing ahead with its plans for an initial public offering. The company set a price range for its stock of $16 to $18, valuing the company at $2.5bn to $2.8bn.

The firm said in a filing with the Securities and Exchange Commission that the proposed flotation could lead to proceeds of up to $562.5m.

Vonage first filed for its IPO in February. The company has since been silent about the move, leading to speculation that it could be pursuing different plans.

Vonage currently operates in the US, Canada and the UK, and has received a licence to start offering its services in Singapore.

It allows customers to apply for local phone numbers in Austria, France, Italy, Mexico, the Republic of Ireland and Spain and expects to add additional countries in the future.

Industry analysts estimated the overall VoIP market in 2004 at between 900,000 to 1.5 million subscribers, and predicted that it will grow to between 8.2 million and 15.3 million by 2007, according to data quoted in the SEC filing.

Since the February filing, Vonage has updated its revenues. Over 2005 the VoIP provider posted a net loss of $261m on revenues of $258m. Canada accounted for $7.6m in revenues and the UK for $982,000.

Vonage lost $60m on sales of $39m during the first quarter of this year, of which Canada accounted for $919,000 and the UK for $57,000.

The company once again warned that there are significant risks involved with investing in Vonage stock.

Vonage does not plan to post profits in the near future, and warned that the quality of VoIP calls is worse than consumers are used to with landlines.

Vonage was founded by Jeffrey Citron, who currently holds the position of chairman and chief strategist and owns 41 per cent of the firm's stock.

Between 1993 and 1998 Citron was involved in an illegal stock trading scheme when he worked at the Datek stock trading firm. He was fined $22.5m by the SEC and barred from association with any securities broker or dealer.