Note: Net2Phone CEO Stephen Greenberg will host a conference call at 4:30 p.m. EST today. The call can be accessed at www.net2phone.com/corporate/ir/ or www.vcall.com. A replay of the conference call will be available online as well.

NEWARK, NJ - June 13, 2002 - Net2Phone, Inc. (Nasdaq: NTOP), the leading provider of Voice-over-IP (VoIP) services, announced results for the third quarter of fiscal 2002 ended April 30, 2002.

Highlights for the third fiscal quarter include:
• Revenues for the quarter of $30.6 million, in line with guidance
• Gross margins of 45%, significantly above peers in the space
• Continued narrowed EBITDA losses (exclusive of charges) by 25% quarterly to ($11.7) million

"Our improved focus on financial discipline and profitable opportunities in VoIP serves as a gateway to long-term growth," said Stephen Greenberg, CEO of Net2Phone. "With restructuring behind us, we can deliver high margin business in new markets globally through our channel sales group. Additional benefit will come from our broadband initiative, which we expect to accelerate cable operators' time to market telephony solutions. We have built the foundation - now it's time to grow the business prudently and efficiently."

THIRD QUARTER FISCAL 2002:
Consolidated revenues for the third quarter were in line with guidance at $30.6 million, a 19% quarterly decline due to the company's recent restructuring, which included the scaling back of certain business lines. Consolidated gross margins for the third quarter stood at 45% excluding charges, an almost fivefold year over year improvement, driven by the company's continued ability to lower termination and connectivity costs while maintaining relatively stable average revenue per minute for both domestic and international termination.

Consolidated EBITDA loss from continuing operations (excluding restructuring and other charges) was ($11.7) million, a 25% improvement over the corresponding ($15.7) million EBITDA loss in the second quarter of fiscal 2002 and a 57% year over year improvement.

Consolidated net loss (excluding restructuring, severance, impairment and other charges) for the third quarter totaled ($24.0) million or ($0.41) per share.

Capital expenditures for the third quarter were $2.6 million, a 72% sequential reduction over $9.4 million spent in the second quarter. SG&A expenses for the quarter narrowed by 30% year over year as the company has reduced costs, including headcount, to align its cost structure with revenues.

Cash, cash equivalents, marketable securities and related investments as of April 30, 2002 were $121.8 million. The company firmly believes it is sufficiently funded to reach EPS positive with its current financial standing.

Net2Phone incurred restructuring charges during the quarter of approximately $114 million, associated with workforce reductions, lease terminations, closure of unprofitable telecom routes, the impairment of long-lived assets and the impairment of goodwill in the context of applicable accounting standards. Impaired assets include network equipment, platform servers, software, customer lists, acquired technology and office furniture and fixtures.

The company expects its near-term growth to come primarily from selling its integrated Voice over IP (VoIP) solutions through its channel partners around the world. For example, India recently opened up for competition in telecom markets and has legalized VoIP services. Net2Phone is aggressively pursuing the right partners in that country, setting its sights on the top Indian ISPs and carriers. The company anticipates quarterly revenue growth to be reinitiated. Gross margins are expected to stay well above competitors, as the company continues to keep its wholesale costs down and retain demand on the retail side.

Net2Phone is modifying its EBITDA breakeven target because of the longer time periods that will be required for the company to begin to fully realize the opportunities that lie ahead in international markets. The process, which begins with signing the right partners and culminates with significant consumer usage, takes anywhere from 120-150 days, and the company is in the process of finalizing solid partnerships with top ISPs and carriers in international markets, and expects to begin to realize revenues from these relationships within that time period.

"This path enables us to be a much larger and more successful company within an acceptable time frame," commented Greenberg. "It is more important for us to gain a strong foothold with strong partners in the right markets. We are back in the growth phase."

Additional benefits could come from Net2Phone's broadband initiative. While the upside from the broadband effort is not currently modeled into Net2Phone's fiscal 2003 budget, since many cable operators have displayed interest in our solution, the company firmly believes this is a market worth pursuing. Net2Phone's broadband solution enables cable operators to completely outsource their telephony services while utilizing existing high-speed networks and leveraging their last mile access into residences.

ABOUT NET2PHONE:
Founded in 1995, Net2Phone is a leading provider of voice services over IP networks to consumers and businesses 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 billions of minutes of traffic over its award-winning network. Traded on the NASDAQ under the symbol NTOP, Net2Phone's strategic partners and investors include Liberty Media Corporation (NYSE: LMC.A; LMC.B), AT&T Corporation (NYSE: T), and IDT Corporation (NYSE: IDT; IDT.B). 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 Report and in the Company's other 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.

Net2Phone, Inc. Condensed Consolidated Statements of Operation