"During Q1, we continued to achieve top-line growth in both our core Wholesale VoIP business, and our newer Prepaid and Enhanced Services (PES) business," said Ofer Gneezy, president and CEO of iBasis. "With more than one third of all international traffic being carried by wholesale carriers, the wholesale market continues to offer significant growth opportunities for those who can manage the complexity of routing, rating, and billing. We continue to refine and strengthen the back-office systems we have developed to our benefit. Today, they provide us with flexibility and precision that constitute a significant advantage in both the wholesale VoIP business and the PES business.

"The sequential growth in the PES business is consistent with our strategy to increase the proportion of our revenue from higher margin services. The PES business successfully leverages The iBasis Network™ and systems to take advantage of the strongest wholesale destinations more efficiently than our competitors in the retail space. We have begun a transformation towards a balance between PES and our wholesale business in margin contribution.

($ in millions)	Wholesale VoIP	PES	Total
Revenue	$53.2	$3.8	$57.0
Gross Margin*	$7.5	$0.9	$8.4
Gross Margin %	14.1%	24.1%	14.8%
* Net revenue less Data Communications and Telecommunications costs.

"In addition to the tremendous progress in both the wholesale VoIP and PES businesses, we continue to explore opportunities to strengthen our balance sheet. Since Q4 2001, we have reduced our debt by almost $147 million through bond exchanges and repurchases. Now, we intend to embark on a program to refinance our remaining debt. We believe that the successful conclusion of this effort will significantly reinforce our ability to build on our leadership in international telecommunications."

Key Indicators

Minutes of use on The iBasis Network™ in the first quarter rose to one billion minutes, a 26% increase over the 792 million minutes carried in the first quarter 2003, and a 7% sequential increase over the 955 million minutes in the fourth quarter of 2003. Average revenue per minute was 5.6 cents per minute in the first quarter of 2004, unchanged from Q4 2003. Average revenue per minute is based on our reported net revenue divided by the minutes of traffic for the applicable period.

Operational Milestones

In the first quarter 2004, Tier One carrier customers generated approximately 52% of Wholesale VoIP revenue, compared to 59% of Wholesale VoIP revenue in Q4 2003. Five of the top ten iBasis customers during the quarter were Tier One carriers. Overseas-originated calls accounted for 45% of revenue in the first quarter of 2004, compared to 41% of revenue in the fourth quarter 2003.

During the quarter, iBasis announced its DirectVoIP™ service, which enables carriers to achieve the cost efficiencies of direct IP interconnection to The iBasis Network simply and quickly by taking advantage of iBasis interoperability with VoIP equipment from a wide range of vendors. We ended the quarter with 263 customers, up from 236 at the end of Q4 2003.

iBasis announced DirectVoIP interconnections with Comindico, the leading IP carrier in Australia, and A-Z Communications, an emerging IP-based service provider in Cambodia.

Debt Refinancing

iBasis has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission relating to a proposed offer to exchange approximately $38.2 million principal amount of its existing 5¾% Convertible Subordinated Notes due 2005 for the principal amount of new 6¾% Convertible Subordinated Notes due 2009. The new notes will be issued in principal amounts equal to the principal amounts of notes tendered. The 6¾% Convertible Subordinated Notes will be convertible into iBasis common stock at a fixed price of $1.85 per share. The old notes were convertible into iBasis common stock at a fixed price of $86.14 per share. The new notes, like the existing notes, will be general unsecured obligations of iBasis. The terms of the new notes will be substantially similar to those of the existing notes. The purpose of the exchange offer will be to offer holders of the existing notes an increase in yield and a significant decrease in the conversion price in return for an extension of the maturity of the notes.

The intended exchange offer will be subject to the satisfaction or waiver of several conditions, including that a minimum number of the principal amount of the existing notes has been validly tendered and not withdrawn. iBasis expects that the exchange offer will be completed by the end of Q3 2004, assuming the conditions to the offer have been met.

Contemporaneously with the closing of the exchange offer, iBasis intends to refinance its 11½% Senior Secured Notes due in January 2005 by repurchasing these notes pursuant to a note repurchase, exchange and termination agreement with the majority holders thereof. In connection with the prepayment of the 11½% Senior Secured Notes, we intend to terminate the various securities exchange agreements between iBasis and the holders of these notes. In consideration of such prepayment and termination, we will issue to the holders of these notes warrants to purchase 5,176,065 shares of our common stock. These warrants will have an exercise price of $1.85 per share and shall be exercisable for a period of three years from the date of issuance. We intend to register the shares of common stock underlying these warrants for resale by the holders of the existing senior notes, pursuant to the terms of a registration rights agreement to be entered into by and among iBasis and the warrant holders.

iBasis has secured a commitment of approximately $25.2 million from a third party funding source to prepay these notes. iBasis will issue new secured convertible notes to the third party financing source or sources in the aggregate principal amount of $25.2 million. We expect that the new secured convertible notes will have an interest rate of 8% per annum, will be convertible into iBasis common stock at a fixed price of $1.85 per share, and will mature three years from the date of issuance. Notwithstanding the existing financing commitment, the prepayment may be financed by any number of other financing sources available or that become available to iBasis on terms as favorable, or more favorable, than those in the commitment from our third party funding source.

This news release does not constitute an offer to exchange or sell, or the solicitation of an offer to exchange or buy, nor shall there be any exchange or sale of these securities in any state in which such offer, exchange, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Noteholders are strongly advised to read the registration statement, tender offer statement and other related documents when they are filed with the Securities and Exchange Commission because these documents will contain important information. Stockholders and noteholders may obtain a free copy of these documents when available from iBasis or at the SEC's website, www.sec.gov.

Noteholders may obtain copies of the exchange offer materials when available from D.F. King, the information agent for the exchange offer, by calling toll free: (800) 859-8508. 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 April 28, 2004, and supersedes all previous guidance.

The Company believes it will achieve positive cash flow and net income in mid-2004, and that it will achieve positive cash flow for the year 2004. The Company expects to refinance its outstanding debt through a public exchange offer for its 5¾% Convertible Subordinated Notes due in March 2005 and intends to refinance its existing $25.2 million of 11½% Senior Secured Notes due in January 2005 contemporaneously with the closing of the intended exchange offer as described in this press release.

About iBasis

Founded in 1996, iBasis (OTCBB: IBAS) is a leading provider of wholesale international telecommunications services. For the past two years the company has been named by service providers as the best international wholesale carrier in Atlantic-ACM's annual International Wholesale Carrier Report Card¹. iBasis is a preferred provider for many of the largest carriers in the world, including AT&T, Cable & Wireless, China Mobile, China Unicom, MCI, Sprint, Telefonica, Telenor, and Telstra. iBasis has carried more than six billion minutes of international voice traffic over its global Cisco Powered Network™, and is one of the ten largest carriers of international voice traffic in the world². In addition to its wholesale international telecommunications services, iBasis provides retail prepaid calling cards to major distributors, utilizing the international iBasis Network. 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.