Vonage Holdings Corp., whose Internet telephone service offers an alternative to traditional residential phones, may offer up to 31.25 million shares priced at $16 to $18 each in an initial public offering, according to a regulatory filing Friday.

Such an offering would value the company, whose service allows a subscriber to make calls using a phone connected to a high-speed Internet line, at $2.6 billion, according to the filing with the Securities and Exchange Commission.

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The offering is expected to be underwritten by Citigroup (C), Deutsche Bank Securities and UBS Investment Bank. The Holmdel, New Jersey-based company has applied for a New York Stock Exchange listing under the symbol "VG".

Ninety-five percent of Vonage's 1.6 million customers are in the United States, the company said, although it has launched service in Canada and Britain.

The company, citing industry analysts, estimates the market for Internet phone service in North American will reach as high as 15.3 million consumers by the end of 2007.

Vonage has built a solid brand name in the growing market for Internet telephony -- also know as voice over Internet protocol, or VoIP. But the upstart, which had revenue of $269 million in 2005, is competing with far larger companies with much bigger marketing budgets and millions of existing customers.

Its rivals include cable providers Comcast Corp., Time Warner Inc. (TWX) and Cablevision Systems Corp., who are all targeting home users with digital phone services.

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