iBasis Reports Record Traffic Volume, Margin, and Revenue For Fourth Quarter and Full Year 2002

Company Reports 39% Sequential Growth in Gross Margins;

55% Sequential Improvement in EBITDA

BURLINGTON, MASS. - February 6, 2003 - iBasis, Inc. (OTCBB: IBAS), today announced results for the fourth quarter and the full year ended December 31, 2002.

Fourth quarter revenue from continuing operations was $42.9 million, an increase of 35% over fourth quarter 2001 revenue of $31.7 million. For the full year 2002, revenue from continuing operations totaled $164.9 million, an increase of 50% over the company's full year 2001 revenue from continuing operations of $110.2 million. Unless otherwise noted, all financial and other information in this release excludes discontinued operations, which have been reported separately.

In accordance with United States Generally Accepted Accounting Principles (U.S. GAAP), net loss for the fourth quarter 2002, including non-recurring items and other charges, was $10.8 million, or a net loss of $0.24 per share, based on 44.6 million weighted average shares outstanding. This net loss compares to a fourth quarter 2001 net loss of $33.6 million, or a net loss of $0.76 per share, based on 44.5 million weighted average shares outstanding.

For the fourth quarter 2002, net loss from continuing operations before non-recurring items and other charges was $10.1 million, or a net loss of $0.23 per share. This net loss compares to a fourth quarter 2001 net loss from continuing operations before non-recurring items and other charges of $25.6 million, or a net loss of $0.58 per share.

In accordance with U.S. GAAP, net loss including non-recurring items and other charges for the full year 2002 was $121.7 million, or a net loss of $2.68 per share, based on 45.4 million weighted average shares outstanding. This net loss compares to a full year 2001 net loss of $190.7 million, or a net loss of $4.47 per share, based upon 42.6 million weighted average shares outstanding.

For the full year 2002, net loss from continuing operations before non-recurring items and other charges was $73.7 million, or a net loss of $1.62 per share. This net loss compares to a full year 2001 net loss from continuing operations before non-recurring items and other charges of $102.3 million, or a net loss of $2.40 per share.

"I am extremely pleased with our continued improvement in gross margin, EBITDA and cash management," said Ofer Gneezy, president and CEO of iBasis. "Overall, 2002 was a year of tremendous change for iBasis. We sold the messaging and speech solutions business units and refocused on our core wholesale telecommunications business. We also took the steps required to improve our balance sheet by conserving our cash and by reducing our debt by more than $127 million since early in Q4 2001. Our continued growth and progress towards profitability is proof of the strength of our business model, the resiliency of our people, and the quality of our services.

"During the year we once again demonstrated our leadership in VoIP by completing a major evolution of the iBasis Network that increased its quality, capacity, and reach while lowering the cost of growing, operating, and supporting the network.

"We continued to win interconnection agreements from major carriers around the world as the demand for high quality international call completion expanded. We experienced steady growth in our value-added pre-paid calling card business in which we provide both the hosted billing platform and call completion services. We also successfully launched a new service, ConnectPoint^® Global Access, which brings the benefits of our global VoIP capabilities to providers of enhanced services such as audio conferencing, pre- and post-paid calling cards, and outsourced call centers.

"While the global telecommunications market continues to struggle, we believe we have a very bright future. The superiority of our business model and our ability to execute has put us on the right path to achieve our goals."

Highlights of the full year and the fourth quarter include:

· Improved EBITDA to a loss of $2.4 million, a 55% sequential reduction;

· Increased gross margin 39% sequentially while maintaining highly competitive pricing;

· Improved working capital management, resulting in a sequential increase in cash;

· Added new carrier customers in the fourth quarter of 2002 including Colombia Telecom, T-Systems (Deutsche Telekom), and Intelig (Brazil);

· Reduced operating expenses to $9.2 million in Q4 2002, down 10% from $10.3 million in Q3 2002 and down 43% from $16.3 million in Q4 2001;

· Increased revenue 50% to $165 million in 2002 compared to $110 million in 2001; and

· Increased minutes 86% in 2002 to 2.6 billion, compared to 1.4 billion minutes in 2001.

Key Indicators

Minutes of use on The iBasis NetworkTM in the fourth quarter rose to 748 million minutes, a 78% increase over the 421 million minutes carried in the fourth quarter 2001, and a 12% sequential increase over the 670 million minutes in the third quarter of 2002. Average revenue per minute was 5.7 cents per minute in the fourth quarter of 2002, essentially unchanged from Q3 2002.

During the year, the company continued to increase network capacity in response to demand by expanding capacity at its existing Internet Central Office facilities and adding Points of Presence (PoPs) to The iBasis Network, ending the year with 43,452 total overseas lines and 771 PoPs.

Operational Milestones

iBasis continued its strong relationships with Tier One carrier customers, who generated approximately 67% of revenue in the fourth quarter 2002, compared to 73% of revenue in Q3 2002. The change was largely due to reclassification of carriers that no longer met our criteria for Tier One designation.

In the fourth quarter 2002, overseas-originated calls accounted for 54% of wholesale telecommunications revenue and 41% of wholesale traffic, up from 40% of wholesale revenue and 34% of wholesale traffic in the third quarter of 2002.

In 2002, iBasis continued to expand its customer base, with major service providers from every region connecting to The iBasis Network. Customers announced in 2002 included Cable & Wireless, Jazztel (Spain), Romtelecom (Romania), Tiscali (France), Orbitel (Colombia), and Data Access (India). iBasis finished the quarter with 173 customers.

In September 2002, iBasis was recognized by Deloitte & Touche's Technology Fast 50 program as the fastest-growing technology company in New England and the 8^th fastest growing technology company in North America¹. During the fourth quarter the company publicly launched its ConnectPoint® Global Access service, a compelling and cost-effective alternative to PSTN backhaul that has attracted leading providers of audio-conferencing and pre-paid calling services. The service was named Product of the Year by Internet Telephony Magazine.

Financial Highlights

Gross margins increased to 16% of revenue, or $6.8 million during the fourth quarter, compared with 12.8% or $4.9 million, in the third quarter 2002.

The company recorded an EBITDA loss of $2.4 million in the fourth quarter compared to a $5.4 million EBITDA loss in the third quarter of 2002, and compared to a $12.7 million EBITDA loss in the fourth quarter of 2001.

Total capital expenditures during the quarter were $815,000. Of this amount, $632,000 was vendor-financed and $183,000 was cash expenditures.

Improvements in working capital management resulted in an increase of approximately $145,000 in the company's cash position during the quarter, compared with a $14.6 million reduction in cash in the third quarter². The company does not expect to achieve free cash flow on a sustainable basis until mid-2004. The company ended the fourth quarter with $32.3 million in cash.

Debt Reduction

Subsequent to the end of the fourth quarter we signed an agreement with the largest holder of the company's 5.75% Convertible Subordinated Notes due 2005, which resulted in the retirement of $30.2 million of the notes in exchange for a new debt instrument at 50% of the face value of the retired notes and warrants to purchase 3,071,184 shares of iBasis common stock. This transaction will result in a gain that will be included in results from operations in Q1 2003, in accordance with recent changes in accounting rules.

Since early in Q4 2001, the company has reduced its debt by more than $127 million through repurchases of convertible bond and vendor lease debt and convertible bond exchanges. The outstanding face amount on the company's 5.75% Convertible Bond Debt is $58.3 million.

Guidance

In light of accounting rules changes under U.S. GAAP and our recent debt exchange, we have focused our guidance on the more meaningful financial milestones of net income and free cash flow rather than EBITDA. Accordingly, the company is issuing new guidance.

The following statements are forward-looking and actual results may differ materially due to factors noted below, among others. The information provided in this financial outlook is as of February 6, 2003, and supersedes all previous guidance.

The company believes it will achieve free cash flow and positive net income in mid-2004.

About iBasis

Founded in 1996, iBasis (OTCBB: IBAS) is a leading provider of wholesale international telecommunications services. Named by service providers as the #1 international wholesale carrier in Atlantic-ACM's 2002 International Wholesale Carrier Report Card, iBasis is a preferred provider for many of the largest carriers in the world, including AT&T, Cable & Wireless, China Mobile, China Unicom, Sprint, Telefonica, Telenor, Telstra, and WorldCom. The company's global VoIP infrastructure, The iBasis Network, is the world's largest international Cisco Powered NetworkTM for Internet Telephony. Based on its revenue growth from 1997 through 2001, iBasis was ranked the #8 fastest-growing technology company in North America and the #1 fastest-growing technology company in New England in the Technology Fast 500 national program sponsored by Deloitte & Touche. 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.

###

Assured Quality Routing, iBasis, and ConnectPoint are registered marks, The iBasis Network, Internet Central Office, Internet Branch Office, and IP CallCard are trademarks of iBasis, Inc. 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 services and the timing and amount of revenue generated by these services; (ii) fluctuations in the market for and pricing of these services; and (iii) the other considerations described as "Risk Factors" in iBasis' most recent Forms 10-K and 10-Q, and the company's other SEC filings. We have no current intention to update any forward-looking statements.

iBasis, Inc.

Condensed Consolidated Balance Sheets

		December 31,
		2002			2001
Assets:
Cash and cash equivalents		$	32,316,609		$	109,823,827
Cash- restricted		--			8,866,667
Accounts receivable, net		20,853,573			24,449,173
Prepaid expenses and other current assets		5,374,390			7,292,483
Assets held for sale - discontinued operations		--			84,253,779
Property and equipment, net		32,357,491			84,279,071
Deferred debt financing costs, net		1,381,927			2,859,814
Long term investment in non-marketable security		5,000,000			5,000,000
Other assets		1,240,321			2,000,266
		$	98,524,311		$	328,825,080
Liabilities and Stockholders' (Deficit) Equity:
Revolving line of credit		$	2,300,000		$	--
Accounts payable		13,142,280			10,659,138
Accrued expenses		20,415,910			28,847,080
Liabilities - discontinued operations		--			4,949,313
Long term debt, current portion		5,348,852			26,309,611
Long term debt, net of current portion		91,289,694			171,343,316
Total liabilities		132,496,736			242,108,458
Stockholders' (deficit) equity:
Common stock		44,650			45,271
Treasury stock, at cost		(339,399		)	--
Additional paid-in capital		369,253,700			369,692,193
Deferred compensation		(412,292		)	(2,225,074		)
Accumulated deficit		(402,519,084		)	(280,795,768		)
Total stockholders' (deficit) equity		(33,972,425		)	86,716,622
		$	98,524,311		$	328,825,080

iBasis, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

		Three Months Ended December 31,
		2002				2001
Net revenue		$	42,934,351			$	31,709,721
Cost and operating expenses:
Data communications and telecommunications		36,118,571				28,203,350
Research and development		3,892,739				6,300,640
Selling and marketing		2,134,348				4,053,859
General and administrative		3,198,652				5,900,202
Depreciation and amortization		5,746,672				9,444,035
Total cost and operating expenses		51,090,982				53,902,086
Loss from operations		(8,156,631			)	(22,192,365		)
Interest income		82,834				1,420,417
Interest expense		(1,936,340			)	(4,747,844		)
Other expenses, net		(97,782			)	(108,219		)
Net loss from continuing operations before non-recurring items and other charges		(10,107,919			)	(25,628,011		)
Non-cash stock-based compensation		(149,021			)	(334,266		)
Gain on sale of messaging business		296,889				--
Restructuring and other non-recurring costs		(1,567,927			)	(14,314,318		)
Net loss from discontinued operations		679,280				(7,916,146		)
Net loss before extraordinary gain on repurchase of Convertible Subordinated Notes		(10,848,698			)	(48,192,741		)
Extraordinary gain on repurchase of Convertible Subordinated Notes		--				14,548,973
Net loss applicable to common stockholders		$	(10,848,698		)	$	(33,643,768	)
Basic and diluted net loss per share:
Net loss from continuing operations before non-recurring items and other charges		$		(0.23	)	$	(0.58	)
Net loss before extraordinary gain on repurchase of Convertible Subordinated Notes		(0.24			)	$ (1.08		)
Extraordinary gain on repurchase of Convertible Subordinated Notes		--				0.32
Net loss applicable to common stockholders		$	(0.24		)	$	(0.76	)
Basic and diluted weighted average common shares outstanding		44,649,942				44,463,299

iBasis, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

		Year Ended December 31,
		2002			2001
Net revenue		$	164,941,789		$	110,179,765
Cost and operating expenses:
Data communications and telecommunications		142,846,999			102,319,685
Research and development		17,781,195			23,939,218
Selling and marketing		11,278,629			20,322,758
General and administrative		24,185,649			25,549,657
Depreciation and amortization		31,870,800			32,363,609
Total cost and operating expenses		227,963,272			204,494,927
Loss from operations		(63,021,483		)	(94,315,162		)
Interest income		1,290,066			9,168,903
Interest expense		(11,607,853		)	(16,517,693		)
Other expenses, net		(382,621		)	(587,246		)
Net loss from continuing operations before non-recurring items and other charges		(73,721,891		)	(102,251,198		)
Non-cash stock-based compensation		(966,573		)	(1,381,800		)
Loss on sale of messaging business		(2,066,080		)	--
Restructuring and other non-recurring costs		(5,536,481		)	(51,834,318		)
Net loss from discontinued operations		(65,222,320		)	(49,770,957		)
Net loss before extraordinary gain on repurchase of Convertible Subordinated Notes		(147,513,345		)	(205,238,273		)
Extraordinary gain on repurchase of Convertible Subordinated Notes		25,790,029			14,548,973
Net loss applicable to common stockholders		$	(121,723,316	)	$	(190,689,300	)
Basic and diluted net loss per share:
Net loss from continuing operations before non-recurring items and other charges		$	(1.62	)	$	(2.40	)
Net loss before extraordinary gain on repurchase of Convertible Subordinated Notes		(3.25		)	$ (4.81		)
Extraordinary gain on repurchase of Convertible Subordinated Notes		0.57			0.34
Net loss applicable to common stockholders		$	(2.68	)	$	(4.47	)
Basic and diluted weighted average common shares outstanding		45,387,450			42,644,700