New Internet telephony rate reduced to 5 cents per minute on domestic calls from New York City and Chicago

Hackensack, NJ -- February 2, 1998 -- IDT Corporation (NASDAQ: IDTC) today released its new $0.05 per minute rate for Net2Phone Direct, IDTís phone-to-phone Internet telephony service, on domestic calls from New York City and Chicago to any telephone in the U.S.

The reduced rate from New York and Chicago is now available, through a controlled introduction, at $0.05 per minute. This rate is in effect 24 hours per day, seven days per week, with no restrictions. Net2Phone Direct is currently available from an additional 50 U.S. cities to consumers and small businesses at a domestic rate of $0.08 per minute from local numbers, and is scheduled to be reduced in the coming months. Users outside the local calling area can access Net2Phone Direct by calling an 800 number. With Net2Phone Direct, calls are routed over IDTís extensive DS3 backbone, enabling top quality and clear transmission of calls. To demonstrate Net2Phone Directís superior quality, the Company is encouraging everyone in the U.S. to place a free one-minute Net2Phone Direct domestic call. To place a free call over Net2Phone Direct or to sign up for service, please call 1-800-CALL-IDT.

"IDT has always been a leader in competitively priced communications services, but this is by far the lowest price youíll find for state-to-state calls," said IDTís President Jim Courter. "When we came out with the 8 cent rate, we wowed the industry, and our sales force was receiving calls by the thousands ñ without spending a dollar in advertising costs. We expect this new rate to generate additional interest and serve to demonstrate voice over IP as the new way of making telephone calls."

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, Internet access and, through its Net2Phone product offerings, Internet telephony services.

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.