By Dina Bass

(Bloomberg) Vonage Corp., the provider of Web- based phone service, advanced in New York trading after rival Jajah Inc. agreed to be bought by Telefonica SA.

Vonage added 4 cents, or 2.8 percent, to $1.48 at 4 p.m. on the New York Stock Exchange. The shares rose 20 percent yesterday after Holmdel, New Jersey-based Vonage introduced an upgraded mobile-phone service.

Jajah, based in Mountain View, California, offers an Internet-calling service similar to that of Vonage. Spain's Telefonica, Europe's second-largest phone company, agreed today to buy Jajah for 145 million euros ($208 million) in cash to be able to offer more Web-based services.

The service Vonage introduced yesterday lets customers make unlimited international calls for $24.99 a month from devices like Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry.

Vonage first sold shares to the public in 2006 for $17 apiece. The stock, which has more than doubled this year, got a boost in August and September as investors speculated that iPhone programs will revive sales.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

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