Arel and Dialogic forge strategic alliance to develop products for Internet fax gateways; Strategic relationship will enable the transmission of real time fax over data networks based on SCSA and open standards.

YAVNE, Israel--(BUSINESS WIRE)--June 6, 1996--Arel Communications and Software Ltd. (NASDAQ/NMS/ARLCF) today announced a framework for a joint development agreement pursuant to which ArelNet Arel's new Joint Venture Company recently being formed with Elron Electronic Industries Ltd.(NASDAQ:ELRNF) will collaborate with Dialogic Corporation (NASDAQ:DLGC) to build, market and distribute hardware and software components for Internet and Intranet fax servers.

These products will enable transmission of real-time fax over data networks, such as the Internet, X.25, Frame Relay etc.

According to industry source, over seventy million fax machines worldwide use expensive long distance circuits to communicate, incurring over $45 billion a year in long distance charges worldwide. Internet fax servers promise to dramatically slash this annual cost by using the ubiquitous and lower cost Internet to interconnect existing fax machines. A standard fax machine or PC-based fax client application can communicate over normal telephone lines with an Internet fax gateway, which will communicate with other another Internet fax gateway near the destination fax device via the Internet. The destination Internet fax gateway will complete the transmission, quickly, cost effectively, and transparently to the users. In effect, high cost, long distance telephony circuits are replaced by the relatively low cost Internet.

Rachel Ben Nun, Arel's CEO, announced the agreement at the Arel annual Users Conference which opened today in Rio de Janeiro, and stated that: "We are excited about partnering with Dialogic, the technical pioneer and market leader in fax and computer telephony components. Data networks Real Time Fax is a natural extension of Arel's extensive enhanced fax services business and our i-Fax Internet product we recently announced. We consider this alliance a great opportunity to forge ahead in this area."

Dialogic supplies the industry-leading portfolio of globally approved telephone interfaces and programmable signal processing products, compatible with Signal Computing System Architecture (SCSA). GammaLink, the inventor of PC fax, is a division of Dialogic.

"Using the Internet to replace expensive long distance charges for delivering faxes has attracted significant interest in the industry and from our customers," commented John Taylor, VP of Engineering at Dialogic's GammaLink Division. "Dialogic and Arel will work together to provide leading edge technology and adopt emerging standards for Internet fax."

ArelNet's ARCOM store-and-forward based, value added network message handling, switching and management system can receive a wide variety of telecommunication messages, including facsimile, telex, telegram, E-mail, telephone and X.400 ,and retransmit them in the same or a transformed protocol. In addition, customers of the ARCOM system can utilize high speed telecommunication networks (e.g. satellite or dedicated leased line) in order to interconnect between the various distributed nodes, whether these nodes are part of their own network or whether an interconnecting agreement with other message handling VAN service providers is created.

The recently announced Internet i-FAX system is a "client/server" line of products which uses the Internet to send international and long-distance faxes, achieving substantial savings on fax cost. The "client" can be a standard fax machine or any PC Windows based application.

Arel Communications and Software Ltd., designs, develops, produces, markets and supports a family of value-added telecommunications network service systems ("VANS"). ArelNet's leading product ARCOM, is rated worldwide amongst the leading products in the field. Arel provides a second family of products, IDEAL, Inter-active distance learning solutions to the training and educational markets worldwide.

Dialogic Corporation is the leading manufacturer of high-performance, standards-based computer telephony (CT) components. Computer telephony systems built with Dialogic products manage more than one third of all telephone, facsimile, and multi-media calls answered by computers over wireless and wired networks worldwide. Dialogic products are used in a multitude of CT applications, including voice, fax, data, voice recognition, speech synthesis and call center management. The GammaLink Division of Dialogic, provides fax solutions for a broad range of existing and emerging CBF applications including LAN fax, imaging, e-mail gateways, and fax-on-demand. GammaLink has an industry-leading 100 products certified by the Postal Telephone and Telegraph (PTT) authorities in more than 33 countries worldwide. Dialogic is a major player in promoting industry standards through the formation of the Signal Computing System Architecture (SCSA) initiative, and is a founding member of the Enterprise Computer Telephony Forum (ECTF). The company is headquartered in Parsippany, N.J., and has sales offices worldwide.

EDITOR'S NOTE: Trademarks are the property of their respective holders.

CONTACT: Dialogic Corporation,

Catherine Stewart

([e-mail]), 1-201-993-3000

or

McGrath/Power,

Patrick Donlon ([e-mail])

or Jonathan Bloom

([e-mail]), 1-408-727-0351

or

Arel Communications and Software Ltd.

Izhak Gross, President, 972-8-9420-880