IDT's Net2Phone Improves Voice Quality
CODEC drastically enhanced, delay down, improved clarity overall, more value-added services to come

Hackensack, NJ -- Oct. 21, 1998 --IDT's (NASDAQ: IDTC) Net2Phone today announced that it has improved voice quality of its Net2Phone Direct (phone-to-phone) Internet telephony service.

Thanks to improvements in CODEC technology, reduced delay, and reduced network bandwidth utilization, the quality of IDT's Internet-based phone calls have increased drastically.

The upgrade has also reduced the delay previously associated with Internet
phone calls by shaving another 40 milliseconds off the delay. In addition,
the Company has reduced network bandwidth utilization with improved voice
activation detection with smoother transitions from voice to silence, which
improves quality and increases bandwidth availability on the Company's
network.

But voice is not the only improvement that has been made to the Net2Phone network. Phone calls that are routed over IP networks allows for more flexibility, including the addition and integration of value-added services. Net2Phone's mission is to offer multiple voice and data services that provide a complete set of communications services - other announcements in that regard will be forthcoming.

"We're extremely excited about these upgrades, because it enables us to
close the gap between regular phone service and our Net2Phone service,
making it virtually imperceptible when placing international phone calls,"
said Howard Jonas, Chairman and CEO of IDT. "This helps us in implementing our goal of offering top-quality multiple voice and data services over one network."

The CODEC upgrade, which has received a high MOS (Mean Opinion Scores for rating codecs) for the phone-to-phone service, is currently in progress and is expected to be completed by next week. CODEC is the voice compression algorithm which takes the voice from the public switched telephone network and squeezes it into fewer bits for transmission over the Internet, which utilizes less bandwidth on the network. The Company's PC-to-phone product, Net2Phone, will also be upgraded with similar enhancements in the near future.

IDT is a leading emerging multinational carrier that combines its position
as an international telecommunications operator, its experience as an
Internet service provider and its leading position in Internet telephony to
provide a broad range of telecommunications services to its wholesale and
retail customers worldwide. The company provides its customers with
integrated and competitively priced international and domestic long
distance, pre-paid calling cards, Internet access and, through its Net2Phone product offerings, Internet telephony services including Net2Phone Direct, Net2Fax, and Click2Talk. For more information about IDT's Internet telephony services, please visit www.net2phone.com.

Except for historical information, all of the expectations and assumptions
contained in the foregoing are forward-looking statements involving risks
and uncertainties. Important factors that could cause actual results to
differ materially from such forward-looking statements, include, but are not
limited to, the competitive environment for Internet telephony, changes of
rates of all related telco rates and services, legislation that may affect
the Internet Telephony industry, IDT 's ability to operate the services
described on a large scale commercial level. For additional information
regarding these and other risks associated with the Company's business
refer to the Company's reports filed with the SEC.