Tuesday July 31, 8:32 am Eastern Time

Press Release

Net2Phone Boosts Presence Throughout Asia

Company's Continued Commitment to Asia Results in Wider Range of Availability of Net2Phone Services

Net2Phone will co-locate its Internet telephony gateways at PowerNet's state-of-the-art Hong Kong-based network infrastructure. Through this relationship, Net2Phone will peer its network with PowerNet's ISP network, enabling higher quality Voice over IP calls throughout Asia. By peering with PowerNet, calls get routed to Net2Phone's voice-optimized managed IP network.

Net2Phone can now take advantage of PowerNet's leading IP infrastructure to increase its cost-effective termination rates worldwide as well as a real-time management platform to monitor routing, billing, network connectivity and rates.

``PowerNet provides a super-node for Net2Phone to offer the highest of Internet infrastructure and quality to our customers in Asia,'' said Howard Balter, CEO of Net2Phone. ``This relationship will now give our resellers the ability to offer increased quality of service to their customers and become competitive with other players in the region.''

Samuel Kam, CEO of PowerNet, was enthusiastic about the relationship. ``Net2Phone has been a major customer for several years, and clearly the best technical provider in the market for IP traffic. By formalizing our arrangements into a strategic partnership for Asia, we each benefit from common marketing and bulk purchasing of bandwidth, and Net2Phone has an advanced platform from which to expand its global reach.''

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.

PowerNet is an Internet Infrastructure Solutions provider, providing Internet solutions engineered for ICPs/ISPs/ASPs and Internet businesses with high-powered, bullet proof and scalable systems. With extensive experience and expertise, PowerNet has recently opened Asia's highest speed Internet Data and Exchange Center, PowerNetix. This six star facility caters to telecommunications, ISPs and Internet businesses wanting the highest connectivity standards and solutions in the industry. Staying on the forefront of the latest technologies and developments, PowerNet has evolved from an ISP to a leading Infrastructure Solutions and Network provider in the region.

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.