The verdict is in on the Vonage IPO:

Consumers and technologists may love Internet phone service, but investors are having second thoughts.

Today, in its first day of trading, shares in Vonage, the country’s leading Internet phone provider, fell nearly 13 percent below its initial offering price.

The sour reception suggested that investors had doubts about whether the company, which has 1.6 million subscribers, could survive in a market where big cable providers like Comcast and Cox are rushing to offer their own competing services.

At $17 per share, the initial price of Vonage’s offering "did not take into account the fundamental risks associated with the competitiveness of the telecommunications landscape," said Richard Greenfield, an analyst with Pali Research.

Vonage’s shares, which are listed on the New York Stock Exchange, plunged $2.15, or 12.65 percent, to close at $14.85. The stock traded higher at the start of trade, then fell to as low as $14.49 before recovering slightly.

Vonage now has a market capitalization of $2.3 billion.

The company sold 31.3 million shares, or 20 percent of its stock, to raise $531.3 million, money it expects to use to attract new customers. Vonage made 15 percent of its new shares available to its customers; a person familiar with the offering said demand for those shares was three times stronger than supply.