IDT Carrier Services - About Us

Volume 1, Issue 1 - Feb 2007

In this Issue...
• Letter from the President
• About IDT Carrier Services
• IDT-Net2Phone Merger
• News from Around the Globe
• Market Trends: VoIP Continues to Grow
• Business Briefs
• Getting to Know Us: Meet Max Silbershatz
• Partner Spotlight: VeriSign
• Upcoming Conventions & Trade Shows

Letter from the President

Welcome to our inaugural edition of the IDT Carrier Services newsletter. It has been an exciting year here at IDT. Our new management team is dedicated to working with you so that you continue to be successful, profitable and armed with even more revenue generating products and services for your customers. We are excited about the direction we are headed with the acquisition of Net2Phone, the pioneer and industry leader in the VoIP arena; our partnership with VeriSign which provides you with innovative messaging, roaming and premium content services; and several exciting hosted solutions. These include, for example, VoIP Telephony for your retail and business customers, the Fixed Mobile Convergence bundle (FMC) and our recently launched Managed Services for MSOs and other service providers.

IDT's hosted solutions make implementation quick while keeping deployment costs low. By removing the need to build and maintain your own service delivery platform, IDT's suite of VoIP and Mobile products enables you to offer leading edge technology services while saving time and investment capital. Clearly, IDT is no longer your grandmother's minutes carrier; rather, today IDT Carrier Services is your total solutions provider.

I hope that you enjoy this newsletter and the opportunity to learn about the amazing changes we are making to offer you more profit generating solutions. At IDT, we remain connected to our strong past, even as we evolve to meet your needs in this most dynamic marketplace.

Warm regards,

Avi Lazar
President of Wholesale and Emerging International Businesses

About IDT Carrier Services

IDT Carrier Services (CS) is proud of its heritage as one of the world's leading wholesale international minutes carriers. Year after year, Telegeography ranks us as one of the top 3 international minutes carriers. In addition, Total Telecom ranked IDT (October 2006 issue) in its Global 100 list of largest network providers. With over 500 carrier relationships, including the world's top tier carriers, IDT continues to be a towering presence in the wholesale minute space.

CS is indeed minutes and much more. As a complete Solution Provider, CS provides Operators with full turnkey products (Voice, VoIP and Mobile) that can be offered to their retail and business customers. When speed to market is important, CS Hosted Solutions is the logical alternative. With IDT's proven experience and global partnerships, Operators can rely on our hosted solutions to generate new revenues without carrying the heavy CapEx burden that is normally required. The IDT value proposition is certainly enticing - low risk and high potential reward. The CS suite of hosted solutions includes Voice Solutions, VoIP Solutions, and Mobile products such as inter-carrier SMS and MMS services.

Additionally, IDT CS is an incubator for products and services that our customers desire but may not have the time or resources to develop. With IDT's global customer base, we enjoy an inherent scalability that enables us to dedicate the necessary resources to develop your company's product of choice. Again, the value proposition is clear - IDT shoulders the burden of development, you enjoy the new revenue streams.

IDT-Net2Phone Merger

IDT Corporation and Net2Phone Inc., a leading VoIP enabler for service providers, merged earlier this year.

Net2Phone provides SIP and wireless hosted solutions to carriers across the globe. As a leader in turn-key hosted VoIP telephony services, Net2Phone has routed billions of VoIP minutes globally, servicing hundreds of thousands of customers worldwide. Now as IDT, we will provide additional global reach and accelerate the customer uptake of these highly sought after hosted VoIP solutions. The combination of IDT's global reach and Net2Phone's best in class technology provides our customers with the high confidence and ease of access to enter today's fastest and most dynamic market.

With Net2Phone's addition to the IDT family, customers can now take advantage of award-winning products and services such as VoiceLine, VoiceDirector, VoiceAccess and VoiceCafe.

News from Around the Globe

Routing Management Services
The CS Miami Office recently closed the first sale of IDT's newly released Collocation Service. With many more deals already in the pipeline, IDT Collocation is proving to be a valuable asset to our carrier partners worldwide.

IDT Collocation Service offers its customers a secure, reliable and aggressively priced managed space with the ability to interconnect to premium telecom networks. It also boasts a carrier neutral space within South Florida's premier carrier hotel and enables customers to deploy and operate critical communication equipment for immediate access to high quality carriers 24/7.

IDT Collo in Miami, Florida is strategically located to serve North America, Latin America, and the Caribbean with high bandwidth connectivity. IDT Collo enables carriers to achieve rapid interconnection with key service providers also located in the hotel.

For those who seek high capacity interconnects with Tier 1 partners, IDT Collo offers premium service and advanced technology at an attractive price point.

To learn more regarding this topic, please contact Meg Collin +1 973 438 3696 or email meg.collin@corp.idt.net.

Europe
Our CS team is now present in 8 countries. We are ideally set up to serve our ever-increasing base of European Carrier Partners. IDT Europe continues its explosive growth, adding 25 new carriers in the last 3 months alone, in addition to our already very comprehensive roster of carrier relationships. Additionally, CS recently rolled out its hosted VoIP and Mobile solutions across Europe, with many qualified opportunities in the product pipeline.

The European team has been organized into regional groups (Northern, Southern, Germany/Eastern Europe) to meet the diverse needs of our expanding customer base. We also have created a team focused on the special needs of new business relationships.

New UK Office
Our UK headquarters have moved to a new office in London! Come visit us at: IDT Global Ltd, IDT House, 44 Featherstone Street, London EC1Y 8RN. Phone: +44 (0) 20 7549 6000.

New Mideast Office
We have just opened our office in Dubai to serve you better. Operating from the commercial and high tech hub of the Middle East, IDT is a strong network of PTT and mobile interconnects. Stop by when you are in town: Jebel Ali FreeZone, LOB 16, Office 134, Dubai, UAE, PO Box: 213461. Phone: +971 4 8819773\

Middle East/Africa (MEAF) Expansion
Recognizing the tremendous value that IDT has brought to the region, MEAF carriers increasingly have been taking advantage of IDT's products and services. Continuing the brisk expansion of our family of telecom partners, we proudly welcome Carrier Partners from Kenya, Sudan, Ivory Coast, UAE, Saudi Arabia, Zimbabwe, Turkey, Bahrain, and Nigeria. Whether its our hosted IP services, services for mobile operators, Managed Services or IDT's traditional voice product, MEAF operators are lining up to take advantage of the Carrier Services product portfolio.

Asia
IDT Asia sets record high minutes With ever increasing demand by Asian carriers for interconnects with IDT and its international switching facility, IDT Asia has reached a record high of 170M minutes per month of traffic and is well on track to surpass the 2 billion minutes mark by the end of the fiscal year.

IDT Asia Star Search
In addition to providing debit platform services for one of the largest carriers in the Philippines, IDT currently offers calling cards in Hong Kong, Korea and Singapore, and as we go to print, is launching sales in Australia and Japan. IDT Asia is supporting the search for the next singing sensation in Hong Kong. IDT's Tawag Na's prepaid calling card, which is used to access the Konek Pinoy information service, will be the exclusive ticket to enter the Tunog Pinoy Star Search competition. Contestants must record their songs on the Konek Pinoy platform using an IDT Tawag Na phone card. The Grand Champion will receive a recording contract with VIVA Records plus a Hong Kong-Philippines roundtrip air ticket.

IDT selected as preferred provider of Western Union
Western Union, the global leader in money transfer services, has launched its "Instant Phone Time" loyalty program in Hong Kong, Australia and New Zealand, and IDT was selected as Western Union's preferred provider in the Asia Pacific region.

Market Trends

Without a doubt, the VoIP trend continues to grow in multiple sectors. If VoIP began as a transport method for many carriers, those same operators today are asking how they can build a subscriber and enterprise customer base in the face of rising VoIP competition.

Given the explosion of VoIP service providers, today's carrier must devise strategies to quickly address the growing threat. True, today's total fixed line subscriptions number an impressive 1.5 Billion. But that total has remained relatively static ("Hot Telecom 2006"). By contrast, worldwide VoIP subscriptions at the end of FY'05 were only 24 million, but grew almost 65% for the year. Remarkably, IP retail telephony revenues grew a full 89% in '05 ("Point Topic 2006"). In the business sector, IPBX orders and installations are growing briskly. In the US alone, IPBX installation will outpace traditional PBX installs in the next 6 months, and close in on the $4 billion revenue mark ("TIA; Infotech"). In this shifting landscape, traditional telecoms are facing opposing forces: the desire to retain and capture new customers by entering the VoIP space, and the complexity of creating an end to end VoIP service offering including all the operational support systems such as billing and provisioning.

According to IDT CS Senior Vice President Robby Schiff, "we found that the simple answer to the carriers' paradox is a complete hosted VoIP solution, where the carrier does not have to build a new phone service from the ground up thus avoiding CapEx, engineering and other business process challenges associated with a new service." Furthermore, hosted solutions enable operators to quickly enter markets while the burdens and risks are primarily shouldered by the hosted service provider. Adds Schiff, "this analysis continues to be proven out."

Since the summer, when IDT began its worldwide rollout of hosted VoIP solutions, the sales force has filled the pipeline with dozens of qualified opportunities. As the trend toward VoIP progresses with no halt in sight, it is clearly those operators that understand how to play in the space while minimizing their exposure who will truly reap the rewards that VoIP has to offer.

Business Briefs

IDT celebrated the 5th year of its listing on the New York Stock Exchange, since it's move from NASDAQ, by ringing the Bell on the trading floor. The March 16th event celebrated IDT's many accomplishments but the spirit of the day was clearly focused on the future.
March, 2006 - IDT Corporation sold its Corbina Telecom division, which operates a licensed full-service telecommunications business in Russia, for approximately $146 million USD.
IDT climbed to 698 from 705 on this year's Fortune 1000 list. (April 17, 2006) IDT was favorably featured in Barron's magazine (May 29, 2006).
"IDT's assets are worth more than it's getting credit for, " the magazine says. "It's not a stretch to say that 'IDT's four divisions,' (Telecom, Spectrum, Net2Phone and Capital) are worth $1 billion. Add that to the $1 billion in cash and that gets you at least $25 a share."
September 29, 2006 - IDT Corporation completed the sale of IDT Entertainment to Liberty Media Corporation for an estimated $500 million, and will participate in 25% of its appreciated value over the next 5 years.
October 12, 2006 - IDT closed the sale of IDT's U.K.-based Toucan consumer phone services business to Pipex Communications plc (AIM: PXC.L) for £20m in cash and £4m in Pipex stock.
October 17, 2006 - IDT Telecom launched TúYo Mobile in Los Angeles, California. TúYo Mobile phones and recharge cards are available at hundreds of retail outlets throughout Los Angeles and Orange County.
IDT has deployed over 230 switches on four continents with seven international gateway switches. Additionally, IDT has a global distributed softswitch platform, a fiber optic backbone network and capacity on 17 different cable systems worldwide.

Getting To Know Us:
Meet Max Silbershatz

Tell us a little about your role.
As VP of Business Development, my role is to work with carriers worldwide. I help them to identify which of our VoIP solutions would best enable them to capture new customers, increase customer Average Revenue Per User (ARPU) and decrease churn.

Now that IDT and Net2Phone have merged, tell us about what new products are available.
IDT offers its customers a robust suite of VoIP solutions for every regional and demographic market segment. Our VoiceLine broadband telephony service is a full Class 5 phone line replacement solution for the residential and SOHO market. For the Small to Medium enterprise market, we have the VoiceDirector full-featured IP PBX and VoiceAccess VoIP trunking solutions. We also enable partners to offer more traditional products, such as calling cards and call shop solutions.

Would you share with us a success story?
Gladly. We have successfully deployed services with carriers worldwide, including: The Caribbean, Philippines, Colombia, Brazil, in the Mideast and many more.

About two years ago, we launched calling card services with Cable & Wireless in the Cayman Islands. As a result of the businesses' success, C&W expanded their product set to include a Broadband Telephony solution, branded "NetSpeak". C&W's objective for this service was to sell end users a bundle of voice and data services which enabled C&W to differentiate their offerings from competitors. The voice component included an unlimited calling plan and an international phone number, all for a fixed monthly price. C&W was able to increase their customer ARPU due to the fixed monthly price of the service. The program was so successful that we now serve all 13 Caribbean territories of C&W. To see the product "live," visit www.netspeak.com.

What does IDT offer in the converged space?
We offer a Fixed to Mobile Convergence (FMC) solution particularly attractive to mobile carriers. The solution helps mobile carriers create a competitive advantage and capture new market share from fixed line providers. The solution can be deployed in phases. Carriers can offer dual mode WIFI/Mobile phones as well as international DIDs to subscribers with existing mobile phones.

How can companies learn more about these opportunities?
If you would like to learn more about our services, please contact your local IDT account representative to schedule an introductory call with our team.

Partner Spotlight: VeriSign

IDT Telecom and VeriSign, a leading provider of intelligent infrastructure services for the Internet and telecommunications networks, recently announced a multi-year agreement to jointly market advanced services to mobile operators.

IDT Telecom will offer VeriSign's Inter-Carrier Short Messaging Service (SMS), Multi-Media Messaging Service (MMS) and Voice Roaming Settlement and Exchange services in the emerging markets of Eastern Europe, Africa, Asia, Central America and Latin America. The services will facilitate interoperability between disparate carrier networks and devices.

The combination of IDT's extensive market reach in emerging markets and VeriSign's managed communications services will enable mobile operators to introduce innovative messaging, roaming and premium content services that can help increase revenue and loyalty.

"International and domestic phone companies rely on IDT for our efficient, reliable and cost-effective routing solutions," said Yona Katz, CEO of IDT Telecom. "Now in conjunction with VeriSign, IDT can provide mobile operators more comprehensive solutions that meet advanced voice and data networking needs."

"VeriSign's intelligent infrastructure services are playing a significant role in the growth of next-generation communications, commerce and content for wireless and wire line providers globally," said Vernon Irvin, Executive Vice President and General Manager, VeriSign Communications Services. "This relationship with IDT Telecom will help VeriSign add customers in fast-growing emerging markets such as Eastern Europe and Africa."

Upcoming Conventions & Trade Shows

IDT Representatives will attend the following conventions and trade shows:

Internet Telephony Expo
January 24-26, 2007
Fort Lauderdale, FL

NCTC Winter Conference
January 31, 2007-February 1, 2007
Albuquerque, NM

3GSM WorldCongress Mobile Eurasia
February 12-15, 2007
Barcelona, Spain

PTC '07
February 14-17, 2007
Honolulu, HI

3GSM Series
March 13-14, 2007
Istanbul, Turkey

CeBIT
March 15-21, 2007
Hannover, Germany

Spring VON
March 20-22, 2007
San Jose, CA

VoIP Latin America
March 28-29, 2007
Sao Paulo, Brazil

6th Regional Turkey, Caspian and Black Sea Telecoms Conference
April 12-13, 2007
Istanbul, Turkey

MECOM 2007 Communications Exhibition and Conference
April 22-25, 2007
Abu Dhabi, UAE