Arel and TV Ontario Enter into an Agreement for the Deployment of Arel's Interactive Distance Learning System - IDEAL - in the Canadian Market.

YAVNE, Israel--(BUSINESS WIRE)--Oct. 7, 1997--Arel Communications and Software Ltd. (NASDAQ:/NMS:ARLCF), today announced that the company and the Ontario Educational and Communication Authority (hereinafter called "TV Ontario") of Toronto, signed an agreement for the deployment of Arel's IDEAL (Interactive Distance Education And Learning) system in their Canadian network.

The IDEAL system will allow TV Ontario's clients in both educational and corporate organizations to operate highly interactive distance education programs that offer tremendous cost savings and at the same time enhance the quality of educational training available to organizations in remote areas.

TV Ontario selected Arel's IDEAL system after an evaluation period comparing it to alternative technologies. The installation of 25 of the first 100 sites ordered started in September 1997.

"TVO found in Arel's IDEAL system a tool which dramatically enhance our educational program offerings. This technology offers advantages we were searching for," commented Donald Duprey, TV Ontario's Managing Director, English programming Services. "Canada requires that kind of service and I believe that TVO's content and Arel's technology provide a winning combination. I am extremely optimistic that we will reach up to 5000 sites within a few years."

"Arel is excited about the agreement with TVO and the entry to the North American market. The IDEAL is a proven technology which brings enormous benefits to distributed organizations such as the educational community TVO is serving so successfully," said Arel's Executive VP Marketing & Sales, Moshe Ben-Yishai. "We have recently increased our marketing efforts in North America and are very pleased to announce this first major sale."

"This announcement together with the recently announced strategic partnership of our subsidiary ArelNet with Nortel (TSE:NTL, NYSE:NT) is an additional step toward developing a company which will play a leading role in both areas -- Distance Education and IP Telephony," said Rachel Ben Nun Arel's CEO.

The IDEAL (Interactive Distance and Education Learning) system is a one-to-many virtual classroom system. It enables the instructor, located in the center, to broadcast, control and conduct in real time, a fully interactive lesson from one center to a large number of classrooms and students in different remote locations within the country and/or worldwide.

The core of the IDEAL system is the interaction and control software, developed by Arel, operating on Windows 95 and Windows NT platforms.

The IDEAL system enables remote students to interact with the instructor by voice, data, and optionally digitize video, while providing the instructor with the capability of monitoring students' attendance and performance.

The IDEAL system offers a combination of advance features for a virtual classroom, with the flexibility of modern operating system and is designed using open software architectures. The system can communicate over a wide variety of communication networks, satellite and terrestrial.

TV Ontario, Ontario's provincial broadcaster, is the largest public educational broadcaster in Canada. It operates two television networks, the English-language TVO, and the French-language TFO. TV Ontario is internationally renowned for its educational programming for both children and adults, which it has sold to 136 countries around the world. Offering more than just television, TV Ontario is also a world leader in the design, development, and application of technologies such as video, CD-ROM, online, and print to classroom learning.

Arel Communications and Software Ltd., designs, develops, produces, markets and supports two product lines in the fields of value-added telecommunications services products, and interactive distance learning solutions to the training and educational markets (IDEAL). Arel's products are successfully operating in over 25 countries worldwide.

CONTACT: Arel Communications and Software Ltd.

Itzhak Gross

Rachel Ben Nun

Tel: [phone]

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