Vonage, the largest player in the fast-growing field of providing telephone services over the internet, is planning to float on the stock market, raising up to $600m (£333m).
The company provides low-cost local and long-distance phone services to 800,000 households in the US. It is also keen to expand abroad and has been advertising heavily in the UK.
The New Jersey-based company would not comment on how many shares it wants to sell in a possible stock market flotation.
It has already raised more than $400m in venture capital from firms including 3i, Bain Capital and Institutional Venture Partners. It is not clear whether the venture capital firms would keep their stakes or sell the in the initial public offering.
Speculation about Vonage's next move comes as competition among companies providing telephone services over the internet is intensifying. Earlier this week Google, the world's largest internet search company, launched its own online voice calling service called Google Talk.
Other internet giants such as Microsoft and Yahoo! are adding voice components to instant messaging and also to gaming, allowing individuals to talk to each other while they play. At the same time cable companies are rapidly adding voice over internet protocol, or VOIP, to their high-speed internet offerings.
There are several ways in which VOIP is available. Vonage allows customers to use a normal telephone, hooked up to a high speed internet connection using an adaptor. The service is largely identical to a standard phone service, except that it runs over an internet connection. Other services, such as that offered by Skype, offer free computer to computer calls, with customers using a headset to talk to each other.
VOIP is much cheaper than many telephone companies' services because providers do not have to build their own copper network. The promise of free, or dramatically discounted, calls via personal computers attracted three million people in the US to internet telephone services last year.
IDC, an IT and telecoms consultancy, predicts this customer base will rise to 27 million by 2009. About two-thirds of large US businesses are using VOIP.
Vonage has notched furious growth since it started offering an internet telephone service in 2002. It was founded by Jeffrey Citron, a technology entrepreneur who created a computerised share trading system called The Island ECN, which Instinet recently acquired for $503m.
Many traditional fixed-line and mobile phone companies, threatened by VOIP, are starting to offer their own VOIP services.