Cable & Wireless and iBasis Interconnected for Global VoIP Services

Cable & Wireless Connects to iBasis for Expanded Service; Relationship with Cable & Wireless Extends iBasis Global Footprint

BURLINGTON, MA-January 22, 2002-iBasis, Inc., (Nasdaq: IBAS), a leader in Internet-based voice communications, today announced that Cable & Wireless, (LSE: CW.L. and NYSE: CWP), the global telecommunications group, has interconnected its global communications infrastructure with The iBasis NetworkTM. The agreement between the two companies will enable Cable & Wireless to route international voice and fax traffic over The iBasis Network, the global Voice over Internet Protocol (VoIP) infrastructure, while allowing iBasis to leverage Cable & Wireless' extensive global network, for termination of its international voice traffic.

Cable & Wireless is a major global telecommunications business with revenue of over US $11 billion (£8 billion) in the year to 31 March 2001 and customers in 70 countries. Cable & Wireless is focused on the provision of high performance global Internet Protocol (IP) and data services to business customers. This agreement will provide supplementary coverage to Cable & Wireless' high quality infrastructure, built around the industry's only single global IP backbone, the AS3561.

"Cable & Wireless and iBasis share a common vision of the future of communications - one that is based on efficient, high quality, global services that leverage the technologies and economics of the Internet," said Andrew McGrath, president, Service Providers, Cable & Wireless. "The agreement with iBasis will help us offer improved international services to our customers."

"Cable & Wireless, like iBasis, was quick to realize the enormous strategic advantages offered by Voice over IP transport," said Ofer Gneezy, president and CEO of iBasis. "The growth of our relationship with Cable & Wireless, now one of our largest customers, reflects their confidence in the reliability and quality of our international service, while their extensive global infrastructure offers our customers improved call termination worldwide."

iBasis in Europe
Today's announcement caps a year of impressive growth for iBasis in Europe. With more than 18 major European carrier customers, iBasis revenues from European voice traffic nearly quadrupled from Q3 2000 to Q3 2001 and represented about 36% of the company's revenues at the end of that period. According to industry analyst publication TeleGeography 2002, Europe has experienced the strongest international traffic growth of any region outside North America, and represented about 43% of all international traffic in 2000, (the latest year for which statistics are available.)

Much of the growing demand for iBasis international VoIP services in Europe, as in other regions, has come from Tier 1 carriers, such as Cable & Wireless. Tier 1 carriers are the world's largest and most demanding service providers. More than 50% of all voice traffic carried by The iBasis Network is generated by Tier 1 carriers.

iBasis and the Move to VoIP
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. Outsourcing international traffic to iBasis offers service providers a powerful competitive advantage by lowering the cost of transport and reducing overall global infrastructure and service support requirements.

According to industry analyst firm TeleGeography, VoIP transport is expected to account for approximately 6% of all international voice traffic in 2001, double the approximately 3% it comprised in 2000. As international voice traffic continues to grow, decreasing sales of traditional circuit-switching equipment and a predicted tripling of VoIP gateway equipment sales¹ over the next five years offers further evidence that the fundamental shift to VoIP is well underway.

About Cable & Wireless
Cable & Wireless is a major global telecommunications business with revenue of over £8 billion (US$11 billion) in the year to 31 March 2001 and customers in 70 countries. Cable & Wireless' focus for future growth is on IP (Internet Protocol) and data services and solutions for business customers. It is developing advanced IP networks and value-added services in the US, Europe and the Asia-Pacific region in support of this strategy. With the capability of its global IP infrastructure and its strength in key markets, Cable & Wireless holds a unique position in terms of global coverage and services to business customers. For more information about Cable & Wireless, go to www.cw.com .

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, Telefonica, Telstra, Sabre Group, Sprint, Western Union, WorldCom, and Verizon. iBasis' hosted, enhanced service solutions include SpeechPortTM, 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. iBasis is listed in both the Russell 2000® and Russell 3000® Indexes. The company can be reached at its worldwide headquarters in Burlington, Massachusetts, USA at 781-505-7500 or on the Internet at www.ibasis.com .

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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 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.