IDT Announces Plans to Release Phone-to-Phone Technology Via the Internet;
Leading telecommunications and Internet provider utilizes its strengths to deploy lowest-cost calling technology using traditional telephones

Hackensack, NJ -- Oct. 1, 1996 --IDT Corporation (Nasdaq: IDTC) announced plans today to release a new technology that will enable users to place calls via the Internet using traditional telephones while still maintaining high sound quality. The service, Net2Phone Direct, reduces the cost of international calls to approximately the cost of a local call. Beta release is scheduled for November 1, with a live release date on January 1, 1997.

"We have reached a unique and extraordinary milestone in the computer telephony industry," says IDT Founder and CEO Howard Jonas. "We've become one of the leading global markets in both the telecom and Internet industries, and now with our Net2Phone Direct, we can effectively utilize all of our strengths to create the most cost-effective method of voice communications."

The service's network switching infrastructure is based on IDT's proprietary Net2Phone model, where users can place calls from their PCs to any telephone in the world. The pricing model is similar to Net2Phone, where international calls can be placed for as little as 10 cents a minute. Unlike other Internet telephony products, Net2Phone Direct's sound quality is equivalent to dialing on a LAN, and will be full-duplex.

Users of the phone-to-phone service will be able to call a local or toll- free access number, available in most areas, which will connect the call to an inbound switch server. This server will convert the call from the telephone's circuit switch network to the Internet's packet switch network. The system will then prompt the user to enter both their account number and telephone number they wish to reach. The call will be carried over the Internet to an outbound switch server located within, or in close proximity to, the country of destination. That server, in turn, will switch the call onto the local telephone network, and complete the call. Because the call only travels a short distance on the circuit switch network, the total cost of the call should be minimal.

Previously, Internet telephony systems required callers to have multimedia computers and Internet connections, which limited the use of Internet phone products to avid surfers. Now, the general public can reap the benefits of Internet telephony without having to purchase costly equipment.

IDT plans to unveil Net2Phone Direct worldwide by January 1, and begin marketing its services to both business and residential customers for calls originating in New York on November 1. Negotiations are underway with representatives in over 100 countries to offer the service overseas by its live release date.

The unveiling of Net2Phone Direct positions IDT as a market leader in both Internet telephony and international telecommunications, due to the Company's vast expertise in global infrastructure and international communications.

"We're thrilled about the upcoming release of this service," said Net2Phone Director Janine Kutliroff. "This is an ever-changing market, and since its inception, IDT has been a leader in Internet Telephony, and now it is bringing this technology to the next level."

IDT Corporation

IDT Corporation is a leading full service telecommunications company offering integrated and bundled telephone, Internet access, and Internet telephony services. The Company provides global long distance telephone services in 120 countries for individuals, businesses, and other long distance carriers. IDT is also one of the country's largest Internet service companies, providing dial-up access to individuals and dedicated access to corporate customers nationwide. The Company recently introduced Net2Phone -- the first commercial telephone service to bridge live calls between the Internet and regular telephones at rates up to 95% below traditional international calling charges. For more information, please visit www.net2phone.com.