Net2Phone Empowers Brazilian Telco with VoIP Solutions

Newark, NJ - August 5, 2004 - Net2Phone (NASDAQ: NTOP), a leading provider of retail Voice over IP (VoIP) services, today announced that it has been selected by Primeira Escolha, a Brazil licensed telecommunications operator, to provide a suite of Voice over IP (VoIP) solutions to be offered in the Brazilian market. The agreement takes advantage of Net2Phone's centrally managed, hosted platform supporting multiple value added VoIP products and services economically.

Net2Phone will provide Primeira Escolha with the capability to offer a full suite of VoIP services, beginning with long distance services using carrier pre-select dialing (CSP), the standard in Brazil. Moving forward, Primeira Escolha will offer calling cards and enterprise VoIP solutions to allow customers a new choice of practical and competitively-priced calling plans using VoIP technology.

This agreement provides Primeira Escolha with the strong foundation that it needs to evolve into a leading domestic and international retail telecommunications service provider in Brazil. By adopting Net2Phone’s VoIP platform value added applications, Primeira Escolha can expedite its time to market and reduce the expenses associated with building new voice products and services.

For Net2Phone, Brazil provides a great opportunity in growing its hosted VoIP platform and solution set in the largest South American market whose telecom sector has recently liberalized. Supporting value-added voice services in Brazil is another step in Net2Phone’s strategy to deliver quality retail services internationally. As the company has done in other newly liberalized markets, Net2Phone works with licensed operators and service providers to quickly roll out cost-effective quality services.

“Brazil represents a prime market for Net2Phone due to the strong demand for competitive telecommunications services,” said Jonathan Reich, CEO of Net2Phone Global Services. “We are enthusiastic about enabling Primeira Escolha with our turn-key solutions and believe that we are well positioned to serve as a market leader in the VoIP space through our relationship with Primeira Escolha in Brazil.”

Mario Leonel, President of Primeira Escolha, agrees. “At almost 100 million telephone lines, Brazil has one of the largest telecommunications networks in the world. With Net2Phone as a partner, Primeira Escolha is poised to enter this market with the most up-to-date VoIP infrastructure available. This translates into low cost, efficient solutions for our customers,” he adds.

Net2Phone allows partners to offer their customers high quality, feature-rich phone service by managing all the back office billing, account generation, rating, routing and provisioning. Products include residential broadband telephony services, calling cards, prefix dialing, and Internet telephony call shop services.

About Net2Phone
Net2Phone provides VoIP PacketCable, SIP and wireless solutions around the world. As leaders in enabling telecom service providers and cable operators with turn-key hosted VoIP telephony services, Net2Phone has routed billions of retail VoIP minutes globally, servicing more than 100,000 users in the US as well as hundreds of thousands of more overseas. Net2Phone's hosted SIP platform provides partners with residential broadband telephony, calling cards, prefix dialing and enterprise services in over 100 countries. Net2Phone's PacketCable platform provides cable operators with the ability to deliver a primary line replacement service with guaranteed QoS and features such as E911. Traded on the NASDAQ under the symbol NTOP, Net2Phone's strategic partners and investors include Liberty Media Corporation (NYSE: L; LMC.B) and IDT Corporation (NYSE: IDT; IDT.C). 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 press release and in the Company's 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.