Net2Phone Reports 2nd Quarter Fiscal 2003 Results
Balance Sheet Remains Solid; Gross Margins Strong at 47%

Newark, NJ - March 10, 2003 - Net2Phone Inc. (Nasdaq: NTOP), a leading provider of retail Voice over IP (VoIP) services, today announced results for the second quarter of fiscal 2003 ended January 31, 2003.

Revenues for the second quarter totaled $23.1 million, as compared to $23.9 in the prior quarter, reflecting the company's focus on higher-margin retail VoIP services. Gross margins for the second quarter were above 40% for the seventh consecutive quarter, at 47%.

Loss from operations for the quarter was ($10.0) million, a $40.1 million improvement over last year. EBITDA (earnings before interest, taxes, depreciation & amortization) for the quarter was ($7.6) million, a $35.1 million year over year improvement. Both loss from operations and EBITDA include certain non-operational and/or non-recurring items that management excludes in assessing the Company's performance. As a result, the Company also reports adjusted EBITDA which excludes the impact these aforementioned items have on the Company's results.

Net2Phone's adjusted EBITDA loss for the quarter was ($3.4) million, a 7% quarterly improvement over adjusted EBITDA of ($3.7) million in the prior quarter, and a 78% year over year improvement over adjusted EBITDA of ($15.6) million. The company believes adjusted EBITDA provides investors with a measure of the company's operational and financial progress that corresponds with the measure used by management. The accompanying table includes a detailed reconciliation of income (loss) from operations to EBITDA and adjusted EBITDA.

Cash, cash equivalents and marketable securities as of January 31, 2003 stood at $111.6 million, as compared to $119.5 million at the end of the prior quarter.

Capital expenditures during the second quarter declined to $1.4 million, primarily due to the company's distributed softswitch architecture enabling Net2Phone to continue to expand its product offerings to new markets without requiring significant incremental infrastructure expenses.

"One of the beauties of Voice over IP is that we can leverage existing IP networks and infrastructure for a global product offering. This allows us to enter newly liberalized markets with an array of retail VoIP products and services without investing a great deal in cap ex," said Stephen Greenberg, CEO of Net2Phone. "Our retail product offerings in new international markets, whether directly or via a reseller, enable us to provide an added value on top of pure VoIP minutes, which would otherwise be commoditized. By staying focused on consumer preferences and offering an abundance of value to our partners and resellers, we can keep our customers happier longer. Our capital adequacy and brand name provide us with the leverage we need to be selective in choosing our partners and resellers, while enabling us to continue to innovate."

The company also announced that Liberty Media and IDT have increased their positions in Net2Phone through the acquisition of AT&T's shares in NTOP Holdings, the company's majority shareholder.

During the quarter, Net2Phone signed and implemented the second phase of its cable telephony offering with Liberty Cablevision (LCV) of Puerto Rico, a wholly-owned subsidiary of Liberty Media. LCV is now providing local and long distance residential VoIP phone service to Liberty Cablevision subscribers and offering traditional phone service features and applications such as call waiting, caller ID, and directory assistance among others. The company also signed a joint marketing agreement with ARRIS, the leading provider of cable telephony worldwide equipment, to offer an end-to-end hosted VoIP solution to cable operators worldwide, leveraging Net2Phone's VoIP expertise with ARRIS' cable telephony experience."

About Net2Phone
Founded in 1995, Net2Phone is a leading provider of voice services over IP networks to consumers, businesses and carriers worldwide. With millions of users around the world, Net2Phone enables toll-quality calls between computers, telephones, and broadband devices utilizing IP networks. 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. Traded on the NASDAQ under the symbol NTOP, Net2Phone's strategic partners and investors include Liberty Media Corporation (NYSE: LMC.A; LMC.B), AT&T (NYSE: T), and IDT Corporation (NYSE: IDT; IDT.B). 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.