International network buildout, improved technology, and increased volume result in reduced rates; Western Europe rates dropping to 10 cents/minute

HACKENSACK, NJ - August 13, 1998 - IDT's (NASDAQ: IDTC) Net2Phone announced today that it will be reducing the rates on its PC-to-phone service to 10 cents per minute to most of Western Europe. Additionally, the Company will also be dropping international rates by up to 60% to the top 25 frequently called countries, which represents an average 70% discount off traditional telecom pricing.

The Company is able to offer these reduced rates by:

• Terminating more calls through recently installed local gateways
• Improving voice compression techniques, enabling more voice to travel
  using less bandwidth
• General telecom deregulation
• Utilizing IDT's current telecom network expansion

The Company does not expect these reduced rates to impact on profit margins on these routes and is passing on efficiencies and reduced costs to its customers.

"We're excited that our leading technology and worldwide IP coverage is
enabling us to bring incredible cost savings to our valued clients around
the world," said David Greenblatt, Net2Phone's Chief Operating Officer. "As
we cut our costs, we will rapidly pass those savings along to our
customers."

Net2Phone enables Internet users to place calls to any telephone in the
world via the Internet, transforming multimedia computers into full service
communications tools. Recipients of the call need not be online as calls are
routed directly to traditional telephones. Because calls are placed through
the Internet, phone rates are not based on the country of origin.

For example, new rates to Germany, France, United Kingdom, Sweden,
Australia, and Norway are 10 cents per minute. Rates that are normally
prohibitively high such as Israel, Italy, Taiwan, and Brazil have been
dropped to as low as 10 cents, 15 cents, 20 cents, and 20 cents per minute
respectively.

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, pre-paid calling cards, Internet access and, through its Net2Phone product offerings, Internet telephony services including Net2Phone Direct, Net2Fax, and Click2Talk. For more information about IDT's Internet telephony services, please visit www.net2phone.com.

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.