Leading Internet telephony provider deploys low-cost calling technology using traditional telephones; encourages users to test the quality with a free call

Hackensack, NJ and Geneva, Switzerland -; September 8, 1997 -- Net2Phone, a division of IDT Corporation (NASDAQ: IDTC), today released technology enabling users to place calls via the Internet using traditional telephones while still maintaining high sound quality. The service, Net2Phone Direct, reduces the cost of international calls by up to 95%. Beginning today, Net2Phone Direct is available in the United States, and a country-by-country roll out is expected to begin next month. The first Net2Phone Direct call was placed this morning to IDT's President Jim Courter at the Telecom Interactive 97 conference in Geneva, Switzerland.

To demonstrate Net2Phone Direct's superior quality, the Company announced today that they are encouraging everyone in the U.S. to place a free Net2Phone Direct call to test out the quality. To place a free call over Net2Phone Direct, please call 800-CALL-IDT.

"We have reached the pinnacle in the Internet telephony industry with the release of Net2Phone Direct," said IDT's President Jim Courter. "We've become one of the leading global marketers in both the telecom and Internet industries, and now with Net2Phone Direct, we can effectively utilize all of our strengths to create the most cost-effective method of voice communications."

Unlike other Internet telephony products, Net2Phone Direct provides unrestricted calling to any telephone in the world and has True Phone Quality (TPQ). The service's network switching infrastructure is based on IDT's proprietary Net2Phone model, which has already enabled users to place calls from their PC's to any telephone in the world for over a year.

Net2Phone Direct users call a local or toll-free number, which connects the call to an outbound switch server. This server converts the call from the telephone's circuit switch network to the Internet's packet switch network. The system then prompts the user to enter their account number and the telephone number they wish to reach. The call is carried over the Internet to an inbound switch server located in Hackensack, NJ. That server, in turn, switches the call onto the local telephone network, and completes the call -- all within fractions of a second. Because the call only travels a short distance on the circuit switch network, the total cost of the call is minimal.

"Thanks to the development team at IDT Laboratories, effective today, anyone in the United States can use Net2Phone Direct from any telephone, even a pay phone, and call to anywhere in the world using our `virtual debit card's; for the lowest available prices," said Yonah Lloyd, Director of Net2Phone. "Net2Phone has the immediate ability to offer this service worldwide, has already partnered with Daewoo Corporation in Korea and Marubeni Corporation in Japan to offer Internet telephony, and as the telecommunications industry shifts towards packet-switched network applications, Net2Phone will continue to lead the industry in providing this service to individual and corporate users."

The current pricing structure is as follows: Calls from local numbers to anywhere in the U.S. cost 8 cents per minute, and for an additional 5 cents per minute, callers can access Net2Phone Direct via an 800-number, likening Net2Phone Direct to a pre-paid calling card. International rates are equally competitive, with per-minute rates to the U.K. at 18 cents, Australia at 20 cents, Germany at 26 cents, and Japan at 29 cents. These rates are effective 24 hours a day, 7 days a week. To sign on for Net2Phone Direct, please call 800-CALL-IDT.

A local access number is currently available in Chicago, which is 312-980-8910, and more will be rolled out in New York, Los Angeles, and other major U.S. cities in the coming weeks. Net2Phone Direct will begin its international launch next month in Europe and Asia. IDT Corporation  IDT Corporation is a diversified telecommunications company with seven years of innovation and profits within the international telecommunications arena. The Company routes and/or resells international long distance services to businesses in 131 countries and directly to telecommunications companies at the carrier level in the US and overseas. The Company currently has over 150,000 US retail customers using an array of services including international long distance and Internet services, and prepaid calling cards. The Company is also a leader in Internet Telephony, with its Net2Phone product - the first commercial telephone service to bridge live calls between the Internet and telephones.

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.