iBasis and Hanaro Telecom Interconnect for Voice over IP (VoIP) Traffic

Direct IP Interconnection with Leading Competitive Carrier of Korean Republic Extends iBasis Reach in Large Asian Telecom Market

BUSAN, REPUBLIC OF KOREA— September 7, 2004 — iBasis, Inc. (OTCBB: IBAS), a leading provider of international long distance service, VoIP, and prepaid calling cards, today announced from the ITU Telecom Asia Conference that Hanaro Telecom, Korea's second-largest fixed-line and Internet broadband operator, has established a direct IP interconnection with the iBasis Network for exchanging international voice traffic.

Through the iBasis DirectVoIP™ service, the interconnection takes advantage of interoperability between iBasis' Cisco Powered™ network and Hanaro Telecom's softswitch manufactured by Xener Systems, a rapidly growing Korean provider of IP-based infrastructure solutions. This direct IP interconnect enables iBasis to expand the company's footprint and network capacity without capital expense. Hanaro Telecom will also benefit from the lower capital and operational costs of VoIP and will have immediate access to iBasis' global VoIP network, which comprises more than 100 on-net countries and carries billions of minutes of international traffic.

"iBasis and Hanaro Telecom, Inc. share the same vision in the Internet-based telecom era, for both wired and wireless communication," said Mr. Ju-Bong Kim, Vice President of Hanaro Telecom. "iBasis has demonstrated a commitment to innovation and quality that is consistent with the Hanaro Telecom vision, and we look forward to a long and mutually beneficial relationship."

"Hanaro Telecom is a leading innovator in using advanced technologies to offer high quality and reasonably-priced services to residential and business customers," said Ofer Gneezy, president and CEO of iBasis. "It is also an example of the continued migration of international voice traffic to VoIP. We are very pleased to be selected to participate in Hanaro's continued growth, leveraging the efficiency and quality of the iBasis global network."

The relationship with Hanaro extends iBasis' footprint in this strategic region. South Korea continues to lead the way in broadband penetration with 70% of households and phenomenal growth in the adoption of IP-based services by residential and business customers.

Hanaro Telecom is one of more than 250 carriers worldwide who have formed relationships with iBasis to send and receive international long distance calls over the iBasis global VoIP network, which has carried billions of minutes of international long distance calls. By providing Tier One quality international service to these carriers, iBasis has become one of the world's 10 largest carriers of international traffic and was ranked by global service providers as the world's best international wholesale carrier for the third consecutive year .

About Hanaro Telecom

Founded September 23, 1997, Hanaro Telecom Inc., is Korea's second-biggest fixed-line and Internet broadband operator. The Company, which was established in 1997 and commenced commercial operations on April 1, 1999, is the only competitive local exchange carrier in Korea licensed to provide voice telephony services across its own last-mile access network. It also provides broadband Internet access, multimedia content and corporate data services bundled with voice telephone in an integrated package. Hanaro deploys multiple broadband last mile access technologies to ensure rapid rollout in high-density areas while preserving access speeds and minimizing coverage overlaps as well as capital expenditure. Hanaro listed on the NASDAQ through issuance of American Depository Receipts (ADRs) on March 29, 2000. Its common shares are listed on KOSDAQ. For additional information, please visit Hanaro Telecom's Investor Relations website: http://ir.hanaro.com/eng

About Xener Systems

Since its inception in February 2000, Xener Systems, Inc. has delivered best-in-class IP-based service platforms and solutions for Next Generation Networks (NGN) and has established itself as one of the leaders in packet-based convergence network technology. Xener Systems facilitates and accelerates the transition of traditional telecommunication networks into NGN that can deliver more for less. Ushering in a new era of NGN, Xener's solutions - ranging from carrier-grade softswitches to enterprise IP PBX - offer carrier-grade reliability and scalability to carriers, data service networks and enterprises. They have been tested, deployed and successfully proven in large-scale commercial networks including KT, SK Telecom, and Hanaro Telecom. The Company can be reached at its headquarters in 4F Hyundae Intellex Bd. 261 Nonhyun-dong, Kangnam-gu, and Seoul, South Korea or on the internet at www.xener.com.

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.

The New England Technology Fast 50 program is presented by Deloitte & Touche and Hale and Dorr, in association with the sponsor, Mazonson Inc. In addition, Mass High Tech and Trinity Communications are associated with the program.