iBasis Interconnected with Telefonica;
Global Carrier Selects iBasis to Expand International Service

iBasis VoIP Service Enables Telefonica to Extend Global Reach;
iBasis Latin American Traffic and Revenues More Than Double In Past Year

BURLINGTON, MA - October 30, 2001 - iBasis, Inc., (Nasdaq: IBAS), the leader in advanced Internet-based voice communications, today announced that global carrier Telefonica has interconnected with The iBasis NetworkTM to expand international service. With this interconnection, Telefonica is able to route its international voice and fax traffic over iBasis' VoIP infrastructure, and iBasis is able to expand the volume of traffic it carries to and from the markets served by Telefonica in Latin America. Telefonica is the leading telecommunications provider for the Spanish and Portuguese speaking countries of the world, and has over 61 million fixed and mobile phone subscribers worldwide.

"We are delighted that global telecommunications provider Telefonica has chosen to connect to iBasis for expanded international service," said Ofer Gneezy, president and CEO of iBasis. "The Telefonica relationship further enhances our strategic position as a leader in Tier-1 VoIP services. With our connection to Telefonica's global footprint, we can provide broad, high quality coverage across Latin America and Europe for our carrier customers."

"Our choice of iBasis for international service reflects our confidence in their quality, reliability, and leadership in VoIP," said Alejandro Hume, Manager, International Voice Services, Telefonica. "Connecting to iBasis offers us strategic competitive advantage by efficiently expanding our global reach, while ensuring our customers call quality indistinguishable from that of traditional transport."

While the international voice services market is expected to be worth more than $70 billion, for most large carriers, international service is not core, and generally represents about 5% of revenues. At the same time, the cost of maintaining global service operations is disproportionately high. This is why large carriers continue to outsource increasing amounts of international traffic to efficient, Tier-1 quality VoIP carriers like iBasis

The iBasis Network in Latin America

Many of the world's largest carriers route international voice traffic over the iBasis Network, which has more than 589 points of presence in more than 80 countries, using its efficient global footprint to provide high quality international service. In Latin America, iBasis has relationships with more than 35 carriers and carries large volumes of voice traffic between the US and Argentina, Chile, Mexico, and Peru. Through its extensive carrier relationships, iBasis has been able to grow its Latin American traffic by more than 123% and revenues by nearly 142% from Q3 2000 to Q3 2001. During that same period, iBasis realized 136% traffic growth and 97% revenue growth for its international voice service between the U.S. and Argentina and traffic growth of 164% and revenue growth of 107% for its service between the U.S. and Mexico. With this growth, iBasis estimates that it now carries more than 15% of all voice traffic from the U.S. to Argentina.¹

iBasis and the Move to VoIP

iBasis handles millions of minutes of traditional carriers' ordinary international voice traffic every day on its global VoIP network. Outsourcing international traffic to iBasis offers service providers a powerful competitive advantage by lowering the cost of transport and reducing overall global infrastructure requirements. According to industry analyst firm Probe Research, VoIP transport is expected to account for approximately 9% of all international voice traffic in 2001, up from approximately 3% in 2000. With international voice traffic still growing, decreasing sales of traditional circuit-switching equipment and a predicted tripling of VoIP gateway equipment sales² over the next five years offers further evidence that the fundamental shift to VoIP is well underway.

iBasis VoIP Service Quality

iBasis guarantees its service quality, offering the industry's first Service Level Agreement (SLA) for VoIP (Voice-over-Internet-Protocol). The key to maintaining the high level of quality required by the world's largest carriers is the company's proven, proprietary Assured Quality RoutingTM (AQRTM) technology. At the company's 24 x 7 Network Operations Centers (NOC) in Burlington, Mass., USA and Hong Kong, the nerve centers of The iBasis Network, engineers continuously monitor the global circuit-switched (PSTN) and packet-switched (IP) networks to ensure the highest quality of service to customers worldwide.

Based on a comparison of iBasis 1H 2001 traffic with global voice traffic statistics in industry analyst publication TeleGeography 2001.

² According to Wintergreen Research "IP vs. Circuit Switching" August, 2001; and IDC "Standalone VoIP Gateways: Market Analysis" August 2000

About Telefonica
Telefonica is the leading provider of telecommunication services for the Spanish and Portuguese speaking countries of the world, and has over 61 million fixed and mobile phone subscribers worldwide. Telefonica provides a full range of corporate, residential, and mobile voice and data communication services in 50 countries with more than 550 million total inhabitants.

About iBasis
Founded in 1996, iBasis (Nasdaq: IBAS) is the leader in advanced Internet-based voice communications. iBasis delivers toll quality international voice services and provides the infrastructure for hosted communications solutions, including messaging and speech-enabled content, e-commerce and customer service applications. The company's customers include many of the largest enterprises and carriers in the world, including AT&T, Cable & Wireless, China Mobile, China Unicom, Concert, ExxonMobil, Gannett, H&R Block, Home Shopping Network, Morgan Stanley, NTT, Telstra, Sabre Group, Sprint, Western Union, WorldCom, and Verizon. iBasis' hosted, enhanced service solutions include SpeechPort^TM, a scalable, customizable ASP environment for speech-enabled business solutions, VoCore^SM messaging and the IP CallCardTM pre- and post-paid calling card platform. The iBasis Network is the world's largest international Cisco Powered Network for Internet Telephony and the first to receive the Unified Communications-Cisco Powered Network (UC-CPN) designation. iBasis is listed in both the Russell 2000® and Russell 3000® Indexes. The company can be reached at its worldwide headquarters in Burlington, Mass., USA at 781-505-7500 or on the Internet at www.ibasis.net .

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Assured Quality Routing and iBasis are registered marks, VoCore is a service mark, The iBasis Network, Internet Central Office, Internet Branch Office, IP CallCard, SpeechPort, IPort, and PriceInteractive are trademarks of iBasis, Inc. or its subsidiaries. Cisco and Cisco Powered Network are registered trademarks of Cisco Systems, Inc. All other trademarks are the property of their respective owners.

Except for historical information, all of the expectations, projections and assumptions contained in the foregoing press release, including those relating to the company's current expectations regarding revenue growth, sources of revenue, margin improvement and future capital expenditures constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Important factors that could cause actual results to differ materially from such forward-looking statements include, but are not limited to, (i) the extent of adoption of the company's new voice-based Internet services and the timing and amount of revenue generated by these services; (ii) fluctuations in the market for and pricing of VoIP services; and (iii) the other considerations described as "Risk Factors" in iBasis' Annual Report on Form 10-K for its fiscal year ended December 31, 2000, and the company's other SEC filings.