Vonage, which provides residential phone services over the internet, is planning an initial public offering to raise as much as $600m, The Wall Street Journal reported on Thursday.

Citing a person familiar with the matter, the newspaper said Vonage had already raised more than $400m in venture capital from firms that include 3i Group, Bain Capital and Institutional Venture Partners.

There was no immediate comment from the Edison, New Jersey-based company, which declined comment to the Journal.

Vonage provides cheap local and long-distance phone services to about 800,000 households, making it the largest US internet-based phone company. It is currently also making a major push in the UK.

Customers with high-speed internet connections plug an adaptor into a regular telephone and get a service that is largely identical to a standard phone service, except that it runs over their internet connection.

Any IPO from Vonage, which has notched furious growth since it started offering a service in 2002, would be an important test of investors' appetite for technology start-ups after many investors were burned by the meltdown of high-profile telecommunications and internet stocks that started in 2000, the Journal said.

Vonage faces increasing competition from deep-pocketed rivals, including AT&T and many cable companies, which are quickly adding voice over Internet Protocol, or VoIP, to their high-speed internet offerings.

Vonage also faces competition from a growing number of internet giants, including Microsoft's MSN unit and Yahoo!, which are adding voice components to instant messaging and gaming.