Arbinet Communications Introduces On-Line Trading of Bandwidth Derivatives.

SAN DIEGO--(BUSINESS WIRE)--May 11, 1999--

Arbinet Communications, Inc., the world's leading trading network for telecommunications capacity, will inaugurate Internet trading of forwards and options in telecommunications bandwidth later this month.

Trading in the bandwidth derivatives is being facilitated through Arbinet's access-controlled website where buyers and sellers can post prices anonymously. Execution occurs offline, subject to a screening process for credit, documentation and interoperability issues. The announcement was made at the TRA Conference, Booth No. 1004.

As a second phase of the project, Arbinet is developing a physically settled derivative product that will allow anonymous web-based execution, culminating in delivery to Arbinet switching hubs. Implementation of this product is an extension of Arbinet's physically settled minutes trading system, the Arbinet Global Clearing Network(TM) (AGCN(TM)).

Forward and option derivative trading in bandwidth provides distinct advantages for clients who wish to hedge their exposure to future moves in the price of capacity. Furthermore, it provides a level playing field where even small operators can realize the pricing advantages which were, until recently, available only to large incumbent telecommunications carriers. Buyers and sellers can manage risk allowing them to better plan for the future.

Sellers of the forward contract can be natural suppliers of capacity such as submarine cable operators. Buyers can be natural consumers (e.g. Internet Service Providers and Competitive Local Exchange Carriers) or speculators.

"Arbinet aims to be the premier provider of risk-management solutions for the bandwidth market," said U. Kanad Chakrabarti, vice president of Bandwidth Trading, Arbinet. "As a non-proprietary player, we can offer impartial execution for our clients, which is important in a non-transparent and illiquid market like this."

All bandwidth contracts will be posted on Arbinet's bandwidth trading site, www.ebandwidth.net, beginning May 21, 1999. The forward contract allows buyers and sellers to reserve transmission capacity. The option contract allows buyers and sellers to realize the optionality value present in the bandwidth market, but currently not fully priced by telecommunications players.

"We provide customers with a service not offered by any other on-line trading company," said Alex Mashinsky, chairman and founder, Arbinet. "Of key importance, we don't trade for ourselves, which gives us complete objectivity in trade execution.

"This new service is a natural outgrowth of our experience in trading telecom minutes on behalf of international and multinational telecommunications carriers."

For more information, contact U. Kanad Chakrabarti at [phone] or via e-mail at [e-mail].

Arbinet (www.arbinet.com) is the world's leading Internet trading exchange and switch-based clearing network for global telecommunications capacity. Arbinet routed over 174 million minutes for international carriers in 1998, which it estimates represented over 80% of all exchange-traded minutes traffic for that year. The Arbinet Global Clearing Network is presently clearing and settling minutes for all types of communications companies including Internet Telephony Service Providers and major carriers. Founded in 1994, the company has 52 employees and is headquartered in New York with offices in Tokyo, Sao Paulo, and Hong Kong. AGCN was recently awarded Internet Telephony magazine's prestigious Editor's Choice Award for 1999.

Arbinet Global Clearing Network and AGCN are trademarks of Arbinet Communications, Inc.

This press release is available on the KCSA Worldwide website at www.kcsa.com