NEW YORK (Reuters) - Internet phone company Vonage Holdings Corp posted a narrower-than-expected fourth-quarter loss on Wednesday as it added new subscribers.

Vonage also said it would restate results from its second and third quarters in 2007, to correct the amount of non-cash stock compensation expenses it recorded.

This was the latest blemish for Vonage, which pioneered offering a low-cost, Web-based alternative to traditional phone services but still faces growing competition from cable and Internet companies which offer bundles of services that include voice, Internet, and video.

Vonage shares rose slightly to $2.05 in early trade on the New York Stock Exchange. While they have edged higher in the past month, they are still down more than 65 percent from one year.

The fourth-quarter net loss was $11.1 million, or 7 cents per share, from a loss of $117 million, or 76 cents a share a year earlier.

Excluding special items, its loss was 6 cents a share. Analysts had expected a loss of 10 cents a share, according to Reuters Estimates.

Total revenue for the quarter rose 19 percent to $215.9 million.

Subscriber additions in the quarter were 56,000, down from 78,000 in the third quarter, and 166,000 in the fourth quarter last year. Vonage ended the quarter with 2.6 million lines.

Churn, a measure of cancellations, remained flat sequentially at 3 percent.

The Holmdel, New Jersey, company added that costs of acquiring new customers fell, shrinking to $223 from $306 in the year-ago quarter. Vonage expects full year acquisition costs to stay in a range of $225 to $250.

Vonage added that currently it is in talks regarding a refinancing of its debt, which it believes it will be able to resolve.

Despite those challenges, Vonage Chairman and interim Chief Executive Jeffrey Citron said the company will continue to expand the company this year.

"Looking to 2008, we are confident in our ability to grow the business profitably and provide customers innovative, feature-rich and cost-effective communications services."

(Reporting by Franklin Paul and Susan Zeidler in Los Angeles; Editing by Derek Caney)

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