[December 06, 2004]

Millennium Digital Media Signs Multi-Year Contract with Net2Phone; Net2Phone To Deliver Full-Featured Telephony Solutions Throughout Millennium's Footprint, Covering 255k Homes, Including Seattle and Baltimore

NEWARK, N.J. & ST. LOUIS --(Business Wire)-- Dec. 6, 2004 -- Net2Phone (NASDAQ: NTOP), a leading Voice over IP (VoIP) enabler for service providers, today announced that it has signed a five-year agreement with Millennium Digital Media, a fast-growing US cable operator with a footprint of more than 255,000 VoIP-capable cable television homes in Maryland, Michigan, Washington and Oregon.


Millennium, one of the 30th largest cable operators in the US, plans to roll out telephony with Net2Phone in initial markets in the first quarter of 2005. Millennium has enrolled in Net2Phone's warrant incentive program, where select cable operators earn warrant grants to purchase shares of Net2Phone common stock, which become exercisable as the cable operator reaches the target telephony subscriber levels.

Through outsourcing its telephony deployment to Net2Phone, residents in Millennium's footprint can benefit from cost-effective local, long distance and international phone service, including features such as call waiting, caller ID, voice mail and online account management tools. In addition to quick and cost effective implementation and operation, Millennium customers benefit from Net2Phone's proven telephony business expertise handling the service and support for the voice network, lowering the costs of and providing the expertise necessary to build a solution internally.

"Net2Phone's ability to respond to our aggressive deployment timetable with a flexible cost-effective solution made them the right partner for us," said Kelvin Westbrook, President and CEO of Millennium. "We look forward to offering our customers reasonably priced telephony throughout our footprint, giving them a rich set of features alongside our current robust video and high-speed data offerings."

"We are excited about quickly offering their customers incremental services over Millennium's cable network," said Liore Alroy, CEO of Net2Phone. "We see the next 12 months as the timeframe for cable operators to choose how to deploy phone service. We believe our value proposition as an outsourced telephony provider that supports a host of solutions and standards makes us the right choice for a cable operator looking to quickly and cost-effectively roll out phone service."

Millennium will maintain ownership of its telephony subscribers and brand, and will provide customer service and technical support. Net2Phone will provide provisioning and billing integration to deliver a unified Millennium invoice, CLASS 5 features, advanced services, network surveillance tools, local and long distance interconnects and operator services/directory assistance. Millennium's customers will benefit from savings compared to the cost of their current phone service, in addition to receiving a bundled offer of cable TV, high-speed Internet access and telephony services.

About Net2Phone

Net2Phone provides PacketCable, SIP and wireless VoIP solutions around the world. As leaders in enabling telecom service providers and cable operators with turn-key hosted VoIP telephony services, Net2Phone has routed billions of retail VoIP minutes globally, servicing more than 100,000 users in the US as well as hundreds of thousands more overseas. Net2Phone's hosted SIP platform provides partners with residential broadband telephony, calling cards, prefix dialing and enterprise services in over 100 countries. Net2Phone's PacketCable platform provides cable operators with the ability to deliver a primary line replacement service with guaranteed QoS and features such as E911. Traded on the NASDAQ under the symbol NTOP, Net2Phone's strategic partners and investors include Liberty Media Corporation (NYSE: L; LMC.B) and IDT Corporation (NYSE: IDT; IDT.C). For more information about Net2Phone's products and services, please visit www.net2phone.com.

About Millennium Digital Media

Millennium Digital Media, headquartered in St. Louis, is a single source provider of broadband services in major metropolitan markets such as Baltimore, Detroit and Seattle. Millennium currently serves more than 128,000 customers in five states, making it one of the 30th largest cable television companies in the United States. Millennium offers basic and premium cable television services, including state-of-the-art digital cable products. Millennium offers a full spectrum of Internet access options with its CableSpeed High-Speed cable modem service. More information about Millennium Digital Media can be accessed on the Internet at www.mdm.net.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward- looking statements involve risks and uncertainties and actual results could differ materially from those discussed in the forward-looking statements. For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Factors which may affect the Company's results include, but are not limited to, the Company's ability to expand its customer base, the Company's ability to develop additional and leverage its existing distribution channels for its products and solutions, dependence on strategic and channel partners including their ability to distribute the Company's products and meet or renew their financial commitments, the Company's ability to address international markets, the effectiveness of the Company's sales and marketing activities, the acceptance of the Company's products in the marketplace, the timing and scope of deployments of the Company's products by customers, fluctuations in customer sales cycles, customers' ability to obtain additional funding, technical difficulties with respect to the Company's products or products in development, the need for ongoing product development in an environment of rapid technological change, the emergence of new competitors in the marketplace, the Company's ability to compete successfully against established competitors with greater resources, the uncertainty of future governmental regulation, the Company's ability to manage growth, obtain patent protection, and obtain additional funds, general economic conditions and other risks discussed in this press release and in the Company's filings with the Securities and Exchange Commission. All forward-looking statements and risk factors included in this document are made as of the date hereof, based on information available to the Company as of the date thereof, and the Company assumes no obligation to update any forward-looking statement or risk factors.

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