ArelNet's i-Tone Brings Wisdom to Oxford.

YAVNE, Israel--(BUSINESS WIRE)--June 3, 1998--Arel Communication and Software Ltd. (NASDAQ ARLCF) announces the successful implementation of ArelNet's market-leading i-Tone(tm) system by the award-winning service provider CommUnity Internet plc, based in Oxford, UK. Serving subscribers across the UK from the historic city of Oxford, the rapidly-expanding ISP is utilising i-Tone's internet faxing module to enable subscribers to benefit from CommUnity Internet's Faxwise low-cost Internet faxing service.

With Faxwise, a variety of businesses can benefit from substantial cost-savings, particularly if they have substantial long-distance and international faxing traffic. The service has ArelNet's gateway-server at its heart, with subscribers using PC-based client software, a specially-installed Smartbox, or the Faxwise email-fax gateway. The Smartbox option can be supplied for situations where a company has no direct Internet access - it is simply connected between fax machine and the telephone socket, with faxed documents being routed transparently across the Internet.

As a result of ArelNet's i-Tone technology, the Faxwise service is able to offer the potential for huge savings on international faxing, with ArelNet's client software enabling PC users to send faxes from any Windows application. It also provides the added flexibility of allowing e-mails to be sent to any fax machine.

Established in 1996, CommUnity Internet plc is a thriving company with a staff of 25, winning an award earlier this year as part of UK-based Internet magazine(1)s 1998 web site design challenge. CommUnity's design expertise has been applied to over 150 web sites, with a wide cross-section of major companies among its hundreds of subscribers, including Comtel, UniqueAir, and the Army Cadet Force Association.

Matthew Hare, managing director of CommUnity Internet plc, commented: "Our Faxwise service represents excellent value - customers only need to make a single economical payment to install the Smartbox or the PC client software, with an extremely rapid pay-back. ArelNet's advanced IP telephony technology is enabling us to offer a highly useful, cost-efficient and reliable service."

i-Tone In Action

i-Tone is a fully integrated IP solution, enabling real-time voice, real-time fax and store-&-forward fax communications on the same ports. Suitable for use by both telcos and ISPs, it is designed to maximise the utilisation of the service provider's network. i-Tone features a turnkey hardware/software solution, enabling multiple services over IP networks, including real-time phone-to-phone, fax-to-fax, PC-to-phone and other related store-&-forward services, such as PC-to-fax, e-mail to fax and fax broadcasting. The most recently introduced enhancements to i-Tone include fax to e-mail and a web fax interface.

The i-Tone Gateway utilises efficient DSP-based voice and fax processing. It supports ITU-recommended voice codecs, such as G.711, G.723 and G.729, to enable interoperability with third party gateways/terminals. The system also supports other leading codecs -- such as SX7300 and SX9600. This versatile technology encompasses optimised voice compression, echo cancellation and packet recovery to ensure carrier-grade voice quality over a variety of network conditions.

ArelNet entered the Internet telephony market in 1995 with its i-FAX fax-over-Internet server. The company focuses on providing reliable, carrier-grade systems to be used by telcos and ISPs world-wide, and has earned its place amongst the leaders of Internet telephony. Amongst ArelNet's most recent corporate developments was the announcement that Nortel has taken a substantial stake in the company - currently holding a 20% equity share. Nortel is also actively marketing the i-Tone server/gateway in North America and to selected customers in Europe.

Arel Communications and Software Ltd., headquartered in Yavne, Israel, designs, develops, integrates and markets software for a family of products in the interactive distance learning market called IDEAL. In addition, through its subsidiary ArelNet, Ltd., Arel designs, develops, markets, produces, integrates and supports, on a worldwide basis, software for two families of message-switching wide-area network systems called ARCOM and i-TONE.

    CONTACT: ArelNet Intl' Headquarters
              Mor Sela
              Tel: [phone] ext. 228
              Email: [e-mail]
              Website: http://www.arelnet.com
              or
              CommUnity Internet plc.
              Matthew Hare
              Tel: [phone]
              Email: [e-mail]
              Website: http://www.faxwise.co.uk
              or
              ArelNet UK PR
              Georgina Garrett/Simon Jones
              Garrett Axford PR
              Tel: [phone]
              Email: [e-mail]
              or
              ArelNet USA PR
              Jeanne Achille
              The Devon Group
              Tel: [phone]
              Email: [e-mail]