Cosmi Selects Arel's Distance Learning System for Its Corporate Training Services.

Business Editors

YAVNE, Israel--(BUSINESS WIRE)--June 12, 2001

One of Italy's Leading Service Providers Will Be Among the First to

Offer Live Interactive Distance Learning to Its Customers

Arel Communications and Software Ltd. (Nasdaq:ARLC), the world's leading provider of corporate training solutions announced today that Cosmi(R), a prominent Italian Service Provider specializing in fast, flexible business solutions, has selected Arel's satellite based system for the delivery of live and on-demand interactive distance learning to its customers, throughout Italy.

Using Arel's suite of e-training solutions, Cosmi will greatly improve its service offerings, increase profits and reposition itself as the premier distance learning service provider in Europe and the Mediterranean basin.

Cosmi is a large Italian concern, broken down into companies and affiliates that offer strategic business planning and commercial advisory services, as well as industrial and corporate management services throughout Italy and Europe. Chronos S.R.L, part of the Cosmi organization, will be licensed to use the Cosmi trademark throughout Italy. Using Arel's IDEAL(TM) suite of e-learning solutions, Cosmi, which already controls 17 operating centers throughout Italy and Europe, will provide its customers with Interactive Distance Learning services, courseware development, instructional design and training services. The first in a series of studios to be opened, has been established in Padua, and has already commenced its broadcasting services.

Cosmi will deploy both the Arel VirtualClass and the Arel Spotlight solutions offering one-to-many live and asynchronous training, that enables instructors to conduct fully interactive training sessions from one center to multiple groups of participants in either dispersed virtual classrooms or directly to their desktops. Using the Arel IDEAL suite of e-Learning solutions, Cosmi will expedite live and asynchronous enterprise-wide corporate training and interactive events that will further support their strategic business processes, expand core competencies and accelerate learning for employees, customers and partners. Most importantly they will be one of the first in Italy, to offer live and on-demand interactive distance services to the public.

Discussing the reasons for selecting Arel, Mr. Alberto Raffaelli, the President of Chronos S.R.L. remarked, "As a leading service provider, it was important to us to ensure that both the instructors and the trainees have the best tools at their disposal, to ensure delivery of stimulating and dynamic distance learning sessions. After investigating other alternatives, Cosmi selected Arel's Interactive Distance Learning system because it was by far the most flexible, scalable and interactive system we had seen. With Arel's solutions, our instructors are able to deliver compelling sessions, while being as responsive to their trainees, as they are in a normal classroom environment."

He further remarked, "Of course the added value of offering Arel's asynchronous solution to our customers, provides us with a significant competitive edge that will enable us to retain and expand our customer base. This solution provides our customers all the benefits of self-paced learning, with all the assets of a live class. The recorded live session captures the instructor's directions, live activities and discussions in their original format, while retaining the interactive benefits of expert-led training."

Shlomo Perry (Friedlander), Arel's Vice President of Sales and Project Management stated, "This marks Arel's entrance into Italy, and its further penetration in the European market. We are confident that our customers will now be equipped to offer a wide choice of value added services to the corporate training market. Although we pride ourselves on always offering our customers considerable training cost saving measures and return on investment, Cosmi will actually be making money by using our system and providing these services to their customers."

About Cosmi

Cosmi(R) provides consultancy services and professional support to a large number of public and private corporations. The company's mission is to supply utilities, services and tools to improve the business development of their customer's organizations. Since it's inception in the early eighties, when the north-eastern Italian region began its period of rapid development, Cosmi(R) has continued to expand its operations and presence throughout Italy and the Mediterranean region.

Cosmi(R)offers the following services:

-- Commercial Advice

-- Management Advice

-- Industrial Advice

-- Innovation Technology

-- Quality System Certification

-- Human Resources

-- Environment System Certification

-- Master & Post Graduated Courses

Cosmi(R) is part of IRENE (Innovation Relay Centre) of the European Community for the North East Italy.

About Arel Communications and Software, Ltd.

Arel Communications and Software, Ltd., Yavne, Israel and its U.S.- based subsidiaries, Arel Communications and Software, Inc. and Arel Learning Solutions Inc., (www.arel.net) market the IDEAL complete family of interactive distance learning and e-Training solutions. Arel IDEAL is the most advanced live and on-demand suite of e-Learning solutions available today, incorporating the latest Web technologies and many years of diligent research and development.

Arel has extensive experience in installing and supporting global IDL networks for many of the world's largest multinational concerns in the telecommunications, financial services, automotive, retail, healthcare, manufacturing, and academic sectors. Equipped with the technology to offer unique business benefits, such as cost-effectiveness, certified results and just-in-time knowledge transfer, Arel solutions improve enterprise productivity, time-to-market, customer satisfaction and profitability.

Arel IDEAL(TM), Arel Spotlight(TM), Arel Spotlight On-Demand(TM), Arel Vision Arel Learning Manager, Arel Evaluator and Arel Campus(TM) are trademarks of Arel Communications and Software. All other trade names are the properties of their respective owners.

Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate," "project," "intend," "expect," "believe," "hopeful," and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements or the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to the Company's products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for the Company's products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key partners, inability to attract and retain qualified personnel, inability to protect the Company's proprietary technology and risks associated with the Company's international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the Securities and Exchange Commission.