Company Continues Worldwide Expansion Plans as It Signs New Operating Agreement and Links the U.S. to South America

Hackensack, NJ.--(BUSINESS WIRE)--Dec. 15, 1997--As part of the Company's strategy to forge pacts with the world's leading telecommunications providers, IDT Corporation (NASDAQ: IDTC - news) announced today that it has signed an operating agreement with a large carrier in Chile to establish a direct fiber-optic connection between the companies for international long distance service. The new link will connect IDT's international switch in the U.S. with the carrier's switch in Chile, and will enable the Company to provide better access and lower termination rates to a number of countries throughout South America. ``Securing this agreement in South America is a very important step for IDT and underlies our goal to interconnect with facilities worldwide and expand our own network,'' said IDT's President Jim Courter. ``After successfully procuring operating agreements throughout Europe, IDT has now begun its expansion into South America, which will result in reduced terminating rates, increased margins, and overall expansion of our network capabilities.'' The agreement establishes direct channels between the Chilean international switching points and IDT's facilities in the United States. The agreement with follows on the heels of IDT's network expansion in Europe and the company's emergence as a carrier of choice around the world. In Europe, IDT already has established a strong presence in the UK with its facilities-based switch, and has purchased more than 12,000 km of undersea cable connecting the US, Canada, and UK. The Company already has numerous operating agreements with carriers worldwide, and plans to continue the worldwide network expansion as well as joint partnerships and operating agreements. IDT Corporation is a diversified telecommunications company with seven years of innovation within the international telecommunications arena offering a variety of wholesale and retail services. The Company routes and resells international long distance services to individuals and businesses in over 225 countries and to telecommunications carriers in the US and overseas. The Company currently has over 400,000 retail customers using an array of services including international long distance, Internet, and Internet telephony services. The Company is a leader in Internet telephony, routing telephone calls over the Internet at substantially reduced rates. 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.