Net2Phone Partners with Afsat to Provide VoIP Satellite Services in Africa; Capitalizes on Relationship with Hughes Network Systems.

Business Editors/High-Tech Writers

ITU TELECOM WORLD 2003

NEWARK, N.J. & NAIROBI, Kenya--(BUSINESS WIRE)--Oct. 13, 2003

Net2Phone Global Services (NGS), a wholly owned subsidiary of Net2Phone, Inc. (NASDAQ:NTOP), a leading provider of retail Voice over IP (VoIP) services, today announced that it has partnered with Afsat Communications Ltd., the largest provider of satellite IP in sub-Saharan Africa, to provide Afsat customers, such as businesses and calling centers, with low-cost VoIP phone calls utilizing satellite broadband.

Under this exclusive relationship, Afsat is offering its 200 local operators and 300 corporate customers a complete satellite VoIP package. This unique offering is based on Hughes Network Systems' market leading DIRECWAY(R) broadband satellite service, together with its DW6000 broadband satellite terminal and the DW6040 Voice Appliance. Net2Phone's VoIP interface is integrated into the DW6040, thereby optimizing voice quality when operating over Net2Phone's system. The service offering is tailored to the corporate market with a suite of applications, including but not limited to calling cards and solutions for call centers. The quality of these phone calls is superior to traditional satellite telephony due to a bandwidth reservation system implemented by Net2Phone and HNS, which allocates prioritization to voice packets over Internet data.

Demand for satellite broadband connectivity is growing worldwide, and is especially popular in markets such as Africa, where terrestrial telephony and Internet infrastructure is limited or non-existent and phone calling is cost prohibitive. Adding a new layer of infrastructure through satellite broadband extends the reach of telecommunications in Africa, expanding the opportunity for telecom penetration and opening up new opportunities in new markets.

"Net2Phone's turn-key telephony solution enables Afsat to focus its efforts on providing an attractive bundle of high-speed data and voice services," said Salim Suleman, Managing Director of Afsat. "This offering fills a huge void that we have in the African telecommunications market - affordable quality phone service."

This partnership builds on Net2Phone Global Services' strategy to offer value-added hosted telecommunications solutions to partners like Afsat, enabling them to offer low-cost VoIP services to their corporate customers quickly, easily and at a low incremental cost.

"Adding voice services to bandwidth providers' offerings such as Afsat's, presents a full suite of solutions to meet the corporate customers' needs," said Yonah Lloyd, Vice President of International Marketing and Business Development at Net2Phone. "Afsat's robust distribution channel throughout sub-Saharan Africa will help bring high-quality, low-cost services to an underserved region."

"Satellite broadband service providers, who use HNS technology, now have the ability to bundle broadband data services with high-quality voice service for their subscribers, in an even more attractive package," said Matthew Mohebbi, Vice President of International Sales and Marketing at HNS.

About Afsat Communications Ltd.

AFSAT Communications, Ltd. is a privately owned company. The majority shareholder is the Modern Africa Fund Managers, an OPIC-backed venture capital fund of US $105 million fully invested in African companies. Two other shareholders are the Wilken Group and Milas Ltd. Afsat is currently the largest VSAT operator in Africa and has been in operation as a private company since 1994. Its customers include ABSA, Barclays, Standard and CRBD banks, Pricewaterhouse Coopers, and 700 other VSAT users. At present Afsat covers 17 countries in Africa in cooperation with local subsidiaries and partners to provide local sales and product support. Afsat pioneered the use of VSAT networks in East Africa and manages their services from Nairobi, Kenya.

About Hughes Network Systems 

Hughes Network Systems, Inc. (HNS), a wholly owned subsidiary of Hughes Electronics Corporation (HUGHES), is the world's leading provider of broadband satellite network solutions for businesses and consumers, with more than 600,000 systems ordered or shipped to customers in 85 countries. HNS pioneered the development of high-speed satellite Internet access services, which it markets globally under the DIRECWAY(R) brand. In addition, HNS is a leading manufacturer of DIRECTV(R) satellite television receivers, having shipped more than 12 million to date. Headquartered outside Washington, D.C., in Germantown, Maryland, USA, HNS maintains sales and support offices worldwide. The earnings of HUGHES, a unit of General Motors Corporation, are used to calculate the earnings attributable to the General Motors Class H common stock (NYSE:GMH). To learn more about HNS, please visit www.hns.com.

About Net2Phone

Founded in 1995, Net2Phone is a leading provider of voice services over IP networks worldwide, enabling toll-quality calls between computers, telephones, and broadband devices. Recognized as the first Company to bridge the Internet with the public switched telephone network, Net2Phone has routed billions of minutes of traffic over its award-winning network. Incorporated within the company are (1) Net2Phone Global Services, which sells retail and small business VoIP solutions globally and (2) Net2Phone Cable Telephony, which has developed a fully outsourced standards-compliant telephony solution for cable operators, using components from companies such as Arris, Motorola, Gallery iPT, Mind CTI, Nuera and CoreOS. Traded on the NASDAQ under the symbol NTOP, Net2Phone's strategic partners and investors include Liberty Media Corporation (NYSE:LMC.A; LMC.B) and IDT Corporation (NYSE:IDT; IDT.C). 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward- looking statements involve risks and uncertainties and actual results could differ materially from those discussed in the forward-looking statements. For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Factors which may affect the Company's results include, but are not limited to, the Company's ability to expand its customer base, the Company's ability to develop additional and leverage its existing distribution channels for its products and solutions, dependence on strategic and channel partners including their ability to distribute the Company's products and meet or renew their financial commitments, the Company's ability to address international markets, the effectiveness of the Company's sales and marketing activities, the acceptance of the Company's products in the marketplace, the timing and scope of deployments of the Company's products by customers, fluctuations in customer sales cycles, customers' ability to obtain additional funding, technical difficulties with respect to the Company's products or products in development, the need for ongoing product development in an environment of rapid technological change, the emergence of new competitors in the marketplace, the Company's ability to compete successfully against established competitors with greater resources, the uncertainty of future governmental regulation, the Company's ability to manage growth, obtain patent protection, and obtain additional funds, general economic conditions and other risks discussed in this Report and in the Company's other filings with the Securities and Exchange Commission. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to the Company as of the date thereof, and the Company assumes no obligation to update any forward-looking statement or risk factors.

HUGHES, Hughes Network Systems and DIRECWAY are trademarks of Hughes Electronics Corporation. Other trademarks are the property of their respective owners.