Shares in Primus Telecommunications Group Inc. lost more than half their value yesterday after the McLean-based company announced it swung to a loss in the face of intensified competition.

The company, which is a well-known brand of long-distance phone service in such countries as Australia and Canada, lost significant long-distance and Internet business to rivals.

"We did not anticipate the pace and intensity of marketing of bundled services" by competitors, chief executive K. Paul Singh said in a conference call following release of the company's earnings after the market's close on Thursday.

Primus shares closed down 50.75 percent, or $1.70, yesterday, at $1.65 a share.

Bell Canada, Primus's chief Canadian competitor, lured customers away with long-distance prices as low as 2.5 cents a minute, John DePodesta, Primus's executive vice president, said on the conference call.

Primushas responded with its own bundle of Internet, long-distance and cellular service. The company also recently started signing up customers for Lingo, its new voice-over-Internet protocol phone service.

"They're trying to follow, but it's hard to do that because it's a big catch-up game," said Richard Klugman, an analyst with Jefferies & Co., which has investment banking business with Primus.

Klugman issued a scathing report on the company yesterday, downgrading its stock and saying its value may not exceed its $500 million in debt. His advice to investors: "It's not too late to sell."

Primus, which sells to business and residential customers, lost $14.9 million (17 cents a share) on revenue of $331.6 million during its second quarter. During the same period a year ago, the company generated a profit of $20 million (21 cents a share) on revenue of $320 million.

Staff researcher Richard Drezen contributed to this report.