iLocus reports Net2Phone controls 72% market share for PC-to-phone services

NEWARK, NJ - June 27, 2001 --- Net2Phone Inc. (NASDAQ: NTOP) today announced that it has received accolades from two of the top market research firms covering the Voice over IP industry.

iLocus, a market research group dedicated to the IP telephony industry, reported that Net2Phone leads the PC-to-phone market, handling about 72% of both traffic and revenue of the global PC-to-phone market. In its report entitled "PC-to-Phone: An Industry at Crossroads," analyzing the current state of the PC-to-Phone industry with a focus on its future prospects, iLocus states that Net2Phone is the acknowledged industry leader.

"Net2Phone's commercial success in PC to Phone market is crucial in making the PC an all encompassing communications platform of tomorrow," said Roderick Beck, analyst at iLocus. "Net2Phone has clearly emerged as the leader in the PC-to-phone space with 72% of the market share. Its success reflects its dominant position in the online marketing channels, and its pursuit of a traditional paid retail telephony model as opposed to the mistaken free banner advertising approach."

Frost & Sullivan awarded Net2Phone the Market Engineering Strategic Alliance Leadership ward, based on its strategic positioning. This award is given to the company that has demonstrated excellence in strategic alliance leadership within their industry, improved its market position based on the development of strategic alliances with firms in competing or related markets, signifying a company's strategic excellence in developing partnerships and alliances that result in better customer service, increased profit potential, improved corporate performance and/or augmented market share. According to its World VoIP Services Market reported published in May, Net2Phone's strategic alliances should have a significant impact on the company's profitability.

"We are honored that iLocus and Frost & Sullivan, both highly respected sources for market information, have presented us with such praise," said Howie Balter, CEO of Net2Phone. "We believe our customers, who have been benefiting from Net2Phone's services for five years, are the truest proof positive and validation of our company's success, and look forward to providing more valuable services to customers worldwide for years to come."

About Net2Phone
Founded in 1995, Net2Phone is a leading provider of voice and enhanced 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 more than 1.5 billion minutes of traffic over its award-winning network. Traded on the NASDAQ under the symbol NTOP, Net2Phone’s strategic partners and investors include AT&T, America Online, and Yahoo!. Net2Phone also offers enhanced hosted service solutions, including voice recognition, for businesses around the world. For more information about Net2Phone's products and services, please visit www.net2phone.com.