Net2Phone Will Make It Possible To Call Any Phone Worldwide From Your PC
Dramatically Lowers Cost Of International Calls

Hackensack, NJ, July 16, 1996 - IDT Corporation (NASDAQ: IDTC) released Net2Phone today, a revolutionary telecommunications technology that will enable all Internet users to call any telephone worldwide from their multimedia PCs at dramatically lower costs than standard long distance calls. The proprietary technology, which was developed by IDT, is the first PC based voice communication that does not require both ends to use PCs, pre-arrange the call, or use the same software.

Using Net2Phone, a call from overseas to anywhere in the United States will cost only 10 cents a minute compared to the average $2.00 a minute charged by the standard long distance carriers. This dramatic cost savings is possible because Net2Phone allows voice data to be carried over the Internet's "packet switch network" until it reaches IDT's U.S. telephone infrastructure. There the signal is converted to the "circuit switch network" used by telephones, enabling the signal to be received by any phone worldwide.

Due to the fact that the signal is carried over the Internet until it reaches IDT's U.S.-based phone switches, rates are not dependent on where the call originates. This allows IDT to offer the low flat rate of 10 cents a minute for calls to anywhere in the United States from overseas. It also makes it possible for IDT to offer dramatic cost savings on international calls originating within the United States. Under the pricing structure for Net2Phone, a call from the U.S. to Australia would cost 21 cents a minute, compared to the 70 cents a minute charged by the average major long distance carrier -- a savings of 70%.

"IDT has always been committed to revolutionizing the telecommunications industry by offering significantly lower cost alternatives to the services of the industry giants," commented Howard Jonas, IDT's chief executive officer. "We changed the international telecommunications market when we pioneered the call back industry and now we are introducing Net2Phone", which we believe will have an even greater effect on the face of international telecommunications."

Net2Phone, which was released today in its beta, half duplex version at New York's Cyber Cafe and London's Network City, allows users to call any U.S.-based 800 and 888 numbers. In celebration of the 120th anniversary of the first telecommunications transmission, Alexander Graham Bell's great granddaughter placed the call from New York to Thomas Watson's great granddaughter in London.

The commercial version of Net2Phone, which will feature a full duplex system that allows the user to call any phone number worldwide, will be released this fall. Anyone interested in downloading the beta version released today can do so directly from the Net2Phone home page at http://www.net2phone.com.

"IDT is very excited about being the first company able to offer this revolutionary telecommunications technology to the public,"added Janine Kutliroff, director of Net2Phone. "The dual success of both our telecommunications and Internet divisions ideally positions us to launch this product."

In the call reorigination industry, IDT services significantly reduce telephone bills, bypassing much higher rates charged by nationally run telephone monopolies. The company currently maintains a strong presence in 65 countries and recently signed a joint-operating agreement with Econophone, an FCC approved international facilities based telecommunications carrier in the United States and Europe, to bolster its telecommunications infrastructure. Currently, the company provides telecommunications services to over 20,000 customers in 120 countries through an international sales network in 65 countries.

In 1994, IDT entered the Internet services market industry where today it provides local dial-up Internet access to approximately 108,000 customers in the U.S. through a nationwide network of 487 points of presence. IDT also provides dedicated Internet access to businesses in the United States, France, Italy, and South Korea.

Founded in 1990, IDT experienced significant growth during its last quarter. Telecommunications revenues grew from $5.8 million to $11.3 million in its last quarter, an increase of 95%, and overall telephone minutes billed and routed through IDT's telecom infrastructure increased by 189% to 33.5 million minutes. Revenues for the Internet business also climbed to $6.9 million, an increase of 76% from the second quarter.