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iBasis DirectVoIP Transcoding Solution Enhances Interconnections to iBasis Network for Consumer VoIP Providers

Industry's First Transcoding Solution Integrates Multi-Codec Support in iBasis' Global VoIP Network for Real-Time Media Conversion

BURLINGTON, MA— September 11, 2006 — iBasis, Inc. (NASDAQ: IBAS), the global VoIP company™, announced DirectVoIP Transcoding, a solution that overcomes a long-standing VoIP industry hurdle by offering iBasis service provider customers real-time media translation capabilities integrated into The iBasis Network™. Providers of consumer VoIP services can now take advantage of a variety of specialized compression/decompression algorithms (codecs) to send voice calls over iBasis' global VoIP network without loss of quality or incurring the cost of converting the calls into other compatible formats. iBasis will be exhibiting at VON in booth #1561.

Unlike traditional telephone calls, most VoIP calls utilize compression technology to enable more traffic to be transmitted over existing IP bandwidth. In recent years, a variety of codecs (compression/decompression algorithms) have been developed to maximize either fidelity (voice quality), bandwidth efficiency, or a combination of both. The variety of codecs introduced potential interoperability challenges as most VoIP networks support only one or two standardized codecs, most typically those developed by the International Telecommunications Union (ITU), such as G.729, G.711, and G.723. As a result, consumer VoIP providers were limited in the networks they could use to complete calls to PSTN and mobile phones around the world or had to incur the cost and latency of converting the traffic themselves.

The DirectVoIP Transcoding solution supports a full-range of codecs from wide-band high fidelity codecs for Voice over Broadband services and applications to low-bandwidth codecs utilizing higher compression for transmission efficiency. With these new capabilities integrated into its global VoIP network, iBasis has solved media codec incompatibility for its service provider customers, assuring high voice quality for retail VoIP consumers and eliminating the cost of performing transcoding at VoIP service points such as conferencing servers, media servers or voice portal servers.

"Solutions that facilitate the worldwide migration to real-time IP communications benefit the entire industry," said Jeff Pulver, chairman of pulvermedia and pulver.com. "VoIP-based network providers should look to solutions which reduce their operational burden and the expenses associated with converting codecs, all without additional equipment investment."

iBasis customers can take advantage of the DirectVoIP Transcoding solution at no additional charge. Codecs supported include several variants of G.711, G.723, G.726, and G.729, plus GSM-FR, Speex, and iLBC.

"We have been continually 'pioneering' VoIP for ten years, even while completing billions of minutes of calls," said Ofer Gneezy, president and CEO of iBasis. "Our customers benefit from our work with the latest technology developments by enhancing the profitability and effectiveness of their operations. The world is rapidly migrating to IP communications, and iBasis is helping to make the transition smooth, efficient, and beneficial for service providers and consumers."

The consumer VoIP market represents approximately 10 percent of iBasis' wholesale revenue, and with more than 40 consumer VoIP providers as customers, it is the fastest growing segment in the company's business. iBasis carried approximately 8 billion minutes of international VoIP traffic in 2005, making it one of the largest carriers of international voice traffic in the world. In June, iBasis announced an agreement to merge the international voice business of Dutch national carrier Royal KPN into iBasis. As a result of the transaction, iBasis will have a combined annual run rate of more than 20 billion minutes of international traffic, second only to Verizon (MCI), according to the most recent traffic data from Telegeography.

About iBasis

Founded in 1996, iBasis (NASDAQ: 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 that are sold through major distributors and available at retail stores throughout the U.S. iBasis customers include many of the largest telecommunications carriers, including AT&T, Verizon, China Mobile, China Unicom, IDT, Qwest, Skype, Telecom Italia, and Telefonica. iBasis carried 7.8 billion minutes of international voice over IP (VoIP) traffic in 2005, and is one of the largest carriers of international voice traffic in the world . For four consecutive years service providers have named iBasis the best international wholesale carrier in ATLANTIC-ACM's annual International Wholesale Carrier Report Card . 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 and Pingo are registered marks, and the global VoIP company and The iBasis Network are trademark of iBasis, Inc. All other trademarks are the property of their respective owners.

This communication may be deemed to be solicitation material in respect of the proposed transaction between iBasis and Royal KPN. In connection with the proposed transaction, iBasis intends to file relevant materials with the SEC, including a proxy statement on Schedule 14A. STOCKHOLDERS OF IBASIS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING IBASIS'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, http://www.sec.gov, and iBasis's stockholders will receive information at an appropriate time on how to obtain transaction-related documents for free from iBasis. Such documents are not currently available.

Participants in Solicitation
Royal KPN and its directors and executive officers, and iBasis and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of iBasis Common Stock in respect of the proposed transaction. Information about the directors and executive officers of Royal KPN is set forth in the Annual Report on Form 20-F for the year ended 2005, which was filed with the SEC on March 14, 2006. Information about the directors and executive officers of iBasis is set forth in iBasis's proxy statement for its 2006 Annual Meeting of Stockholders, which was filed with the SEC on March 23, 2006. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the transaction when it becomes available.

Safe Harbor for Forward-Looking Statements
Statements in this document regarding the proposed transaction between iBasis and Royal KPN, including [the expected timetable for completing the transaction, the expected dividend payment, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding the parties' future expectations, beliefs, goals or prospects] constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered forward-looking statements. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the parties' ability to consummate the transaction due to regulatory restrictions, the failure to receive stockholder approval, or other reasons, the ability of iBasis and Royal KPN to successfully integrate their operations and employees, the ability to realize anticipated synergies, the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market, business conditions and volatility and uncertainty in the markets that iBasis and Royal KPN serve, and the other factors described in iBasis's Quarterly Report on Form 10-Q for its most recently completed fiscal quarter and Annual Report on Form 10-K for its most recently completed fiscal year and Royal KPN's Annual Report on Form 20-F for its most recently completed fiscal year all of which are available at www.sec.gov. The parties expressly disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this release.