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Telemar, Brazil's Largest Carrier, Interconnects with iBasis

Leading Provider of Fixed, Mobile, Broadband, Long Distance, and Corporate Data Services, Selects iBasis to Support Expanding International Service

BURLINGTON, MA— September 26, 2005 — iBasis, Inc. (OTCBB: IBAS), a leader in international long distance, VoIP, and prepaid calling cards, today announced that Telemar Norte Leste S.A. (NYSE: TNE), an integrated Telecom services provider that is becoming a major force in the international long distance market, has interconnected with The iBasis Network™ to exchange international voice traffic. The interconnection with iBasis enables Telemar to route international calls from Brazil over iBasis' global VoIP network, as well as complete calls for iBasis over Telemar's fixed and mobile networks to all destinations in Brazil.

Telemar benefits from the lower capital and operational costs of the iBasis VoIP infrastructure and has immediate access to its global footprint, which comprises more than 1,000 direct routes in more than 100 on-net countries. Telemar leverages iBasis operational expertise in managing international routing and also benefits from iBasis proprietary technologies - Assured Quality Routing® and PathEngine™, which deliver consistently high quality and call completion.

By providing Tier One quality international service to carriers, iBasis has become one of the world's 10 largest carriers of international traffic and continues to increase its market share of international voice traffic. iBasis currently carries more than 16% of all international VoIP traffic.

"As Brazil has gradually deregulated its telecommunications industry over the last few years, Telemar has been very effective in expanding from local and intrastate service into international long distance, mobile, and broadband data services," said Ofer Gneezy, president and CEO of iBasis. "As a result, it is a growing source of both outbound traffic from Brazil and of high quality termination capacity within the country, which is a very important and rapidly growing destination for iBasis."

Telemar joins iBasis' growing customer base of approximately 350 carriers worldwide, who rely on iBasis both to complete their international calls over the company's global VoIP network and to provide a reliable and growing source of inbound traffic from which they derive termination revenue. In the first half of 2005, the iBasis network carried approximately 3.6 billion minutes of international calls. "Continuing to provide our retail and carrier customers the highest quality of service is critically important as we expand our business," said Abel Camargo, Director of Wholesale Business Unit at Telemar. "Our relationship with iBasis enables us to deliver high quality international long distance service while also establishing a reliable source of revenue from Brazil-bound traffic from one of the world's largest international carriers."

About Telemar

Telemar is a leading integrated telecommunications service provider operating in six business areas in Brazil: fixed line local service, domestic and international long distance, Wireless, Broadband, Data & Corporate services and Internet service. Already a leader in local and long distance service, Telemar has become the second largest mobile provider in Region I less than three years after launching its Oi service. The company's domestic network covers 65% of Brazil reaching more than 94 million inhabitants. Telemar (NYSE: TNE) has a market capitalization of more than US$ 4 billion. For more information, visit the company's website at www.telemar.com.br.

About iBasis

Founded in 1996, iBasis (OTCBB: IBAS) is a leading wholesale carrier of international long distance telephone calls and a provider of retail prepaid calling services, including the Pingo™ web-based offering (www.pingo.com) and disposable calling cards, which are sold through major distributors and available at retail stores throughout the U.S. iBasis customers include many of the largest telecommunications carriers in the world, including AT&T, Cable & Wireless, China Mobile, China Unicom, MCI, Sprint, Skype, and Telefonica. iBasis carried approximately 5 billion minutes of international voice over IP (VoIP) traffic in 2004, and is one of the ten largest carriers of international voice traffic in the world1. For four consecutive years service providers named iBasis the best international wholesale carrier in ATLANTIC-ACM's annual International Wholesale Carrier Report Card2. iBasis was also ranked among the fastest-growing technology companies in New England in the 2002, 2003, and 2004 Technology Fast 50 programs 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.

   
 
 
     

 

 


1 Telegeography 2005 data compared with iBasis 2004 traffic volume.

2 ATLANTIC-ACM International Wholesale Carrier Report Card - 2002, 2003, 2004, & 2005.

iBasis is a registered mark and Pingo is a trademark of iBasis, 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.

Use of Non-GAAP Financial Data
The Company provides certain financial data in addition to providing financial results in accordance with GAAP. This data is not in accordance with, or an alternative to GAAP, and may be different from Non-GAAP financial data used by other companies. This Non-GAAP financial data includes average revenue per minute, which the Company believes provides useful information, to both its management and investors about the Company's current performance.