Hackensack, NJ--(BUSINESS WIRE)--August 29, 2000--Net2Phone Inc. (NASDAQ: NTOP - news ) today announced that Marconi, a wholly owned subsidiary of Portugal Telecom (NYSE: PT - news ) and a global communications and IT company, will join Net2Phone's global IP network by installing gateways to route Voice over IP traffic utilizing Net2Phone's voice-optimized IP network.

Under the agreement, Marconi will install Net2Phone's carrier-grade IP telephony gateways at their sites throughout Portugal, and will begin routing IP voice carrier traffic over the Net2Phone network. Net2Phone will provide Marconi with installation, training, and network monitoring, enabling real-time access to Net2Phone's technology, gateways and billing systems.

By joining Net2Phone's network, Marconi increases its alternatives of getting cost-effective termination rates worldwide as well as a real-time management platform to monitor routing, billing, network connectivity, and rates.

Net2Phone's fully redundant carrier-grade gateways connect to legacy telephony devices via T1, E1 or analog interfaces. By utilizing Net2Phone's existing Least Cost Routing capabilities, Net2Phone provides efficient toll quality audio, and can terminate calls to anywhere in the world at reduced costs.

``We are very proud that Marconi has selected Net2Phone as its Voice over IP provider, given their expertise in both communications and the Internet,'' said Kenneth Helfer, Vice President of Carrier Sales for Net2Phone. ``In just a few months, Net2Phone has expanded its wholesale efforts to Europe, Asia, and Latin America, and we will continue to serve the carrier community with attractive rates and value-added services.''

Marconi is a major international group focused on high growth communications and selective markets for high technology products. Marconi's business activities which are based on the fully owned facilities of Portugal Telecom include developing and supplying communications and solutions to telecommunications operators and Internet service providers (ISPs) in the carrier network market and corporations, government departments and agencies, utilities and educational institutions in the enterprise network 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 October 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.