Vonage eyes $39m settlement with AT&T

Internet phone company Vonage Holdings is in talks with AT&T to settle a patent suit, the last of several filed against it by traditional phone companies, an Associated Press report said.

The Associated Press report said Vonage and AT&T are discussing settling the suit for $39 million, an amount to be paid over the next five years.

In October, it settled with Sprint Nextel for $80 million, and with Verizon Communications for between $80 million and $120 million, depending on the outcome of a court hearing, the report said.

Vonage has been able to pay those settlements because it pulled in money from investors in an initial public offering last year at $17 a share, the report said.

The company, meanwhile, lost $161.7 million, or $1.04 per share, in the third quarter, including $132 million in charges due to the settlements. In the same quarter last year, it lost $62.1 million, the Associated Press report said.

Excluding some charges, the third-quarter loss totaled $16 million, compared with $62 million, or 40 cents per share in last year's third quarter.

Revenue rose 30% to $210.5 million. Vonage ended the quarter with $154 million in free cash, down from $356 million, the report further said.