Barak Joins Net2Phone's IP Global Network Companies in Managing IP Networking and Collocation Agreement.

Business &Technology Editors

HACKENSACK, N.J. and ROSH HA'AYIN, Israel--(BUSINESS WIRE)--Feb. 9, 2000

Net2Phone Inc. (NASDAQ: NTOP) and Barak ITC today announced an IP networking and collocation agreement, enabling Net2Phone to extend its Internet telephony network throughout Israel.

Under the agreement, Net2Phone will collocate its Internet telephony gateways at Barak's points of presence throughout Israel, enabling Net2Phone to offer its phone-to-phone Internet telephony service to Israeli consumers and enterprises beginning in April. Net2Phone plans to sell these phone-to-phone services directly as well as through its relationship with America Online's (NYSE: AOL) ICQ instant messaging service. Barak plans to considerably expand its position in the Internet telephony space in the coming years, and considers itself a leading player in providing infrastructure and Internet access throughout Israel.

According to Avi Patir, CEO of Barak, &uot;The cooperation between Barak and Net2Phone in the area of Internet infrastructure for the transmission of telephony marks a further stage in Barak's extensive Internet activities. Barak provides leading organizations and companies in Israel and abroad with infrastructures and access to the Internet.&uot;

Patir noted that considerable expansion is anticipated for the coming years in the market for telephony transmission via Internet infrastructure, and &uot;Barak considers itself a leading player in the provision of infrastructures and Internet access services.&uot;

&uot;Israel's cellular penetration has exploded over the past few years and has emerged as one of the top countries using wireless technologies. We anticipate many Israelis to utilize Net2Phone over their wireless phones,&uot; said Uri Schechterman, VP of International Sales at Net2Phone.

According to a recent study by Global TGI, a New York-based market research firm, 61% of Israelis have a cell phone for personal use, as compared to 39% in the U.S.

&uot;The Israeli marketplace for telecommunications is mushrooming daily, and we are very excited to be expanding our product offerings in fast-growing countries,&uot; Schechterman continued. &uot;Our customers in Israel have been using our PC-based services for years, and we are pleased extend our products and services to include calling from traditional phones whether at home or as they travel around the world.&uot;

Barak joins AT& and Sprint and dozens of other carriers working with Net2Phone to route calls over the Internet. Competitive carriers in major markets are partnering with Net2Phone to expand its IP reach worldwide. Barak will also supply Net2Phone with IP connectivity between the U.S. and Israel.

With more than 30 million Internet telephony minutes routed worldwide monthly, Net2Phone's suite of voice over IP services has become an alternative to international long distance. Net2Phone provides PC-to-phone, phone-to-phone, fax-to-fax, and voice-enabled e-commerce solutions to consumers and businesses worldwide.

BARAK I.T.C. began offering international telecommunications services to the Israeli public in July, 1997 as one of three Israeli companies licensed for such services. Its shareholders include Sprint, Deutsche Telekom, France Telecom, Clalcom Ltd. - a subsidiary of one of Israel's largest holding companies-and Matav-Cable Systems Media Ltd., a diversified Israeli telecommunications company. In April1997, BARAK and Global One signed a National Partnership Agreement under which they jointly market and sell the full portfolio of Global One services in the Israeli market.

Net2Phone is a leading provider of voice-enhanced Internet communications services to individuals and businesses worldwide. Net2Phone enables people to place low-cost high quality calls from their computer, telephone, or fax machine to any telephone or fax machine in the world. Net2Phone develops and markets technology and services for IP voice and e-commerce solutions for the web and other IP networks. For more information about Net2Phone's products and services, please visit www.net2phone.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, among other things, Net2Phone's expected operating performance for the three months ending January 31, 2000 and thereafter. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainty of financial estimates and projections, the competitive environment for Internet telephony, changes of rates of all related telco rates and services, legislation that may affect the Internet telephony industry, and Net2Phone's ability to operate the services described on a large scale commercial level.The forward-looking statements are made as of the date of this press release, and Net2Phone assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth herein and the other information set forth from time to time in Net2Phone's reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.