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Arbinet Raises $30 Million from Syndicate of Global Financial Institutions

B-to-B e-commerce telecommunications Exchange receives second-round financing from leading institutional investors including J.P. Morgan Capital, Chase Capital & BancBoston Ventures

NEW YORK — December 2, 1999 — Arbinet Communications, Inc., the world’s premiere exchange for telecommunications capacity, announced today that it has received $30.45 million in a second round private equity financing for a minority stake in the company. The investor from a syndicate included J.P. Morgan Capital Corp., Chase Capital Partners, BancBoston Ventures, ComVentures, Bedrock Capital Partners, Internet Capital Group (NASDAQ: ICGE), and funds affiliated with Robertson Stephens, Soundview Technology Group, and Deutsche Banc Alex Brown.

“Bandwidth for voice and data communications will clearly be the leading commodity for the 21st Century and this investment solidifies Arbinet’s position as the dominant exchange for trading telecom capacity,” stated Alex Mashinsky, founder and Chairman of Arbinet. “By standardizing the units of trade for minutes and bandwidth, we intend to bring to the international telecom marketplace the same liquidity, execution, and clearing efficiencies enjoyed by the world’s leading financial markets.”

Arbinet provides international Tier 1, Tier 2, and Tier 3 carriers with a real-time Internet trading exchange, a switch-based clearing network, and outsourced routing, procurement, inventory, and risk management. Arbinet allows calls to be routed for the lowest price and highest quality available to any destination worldwide from a rapidly increasing inventory of over 40,000 sales orders. Arbinet’s anonymous and neutral Exchange and centralized switching infrastructure allows its Members to: optimize their their network capacity; ,maximize their interconnectivity with other carriers in real-time;, and minimize network operating costs and SG&A. Arbinet’s carrier-grade infrastructure supports all major signaling standards including C7, SS7, ISDN, IP, MF, DTMF, E1 and T1.

Paul Theunissen, who led the investment for J.P. Morgan Capital, stated, “Arbinet is a prime example of a B-to-B e-commerce company fully leveraging the Internet to change the fundamental business process and underlying economics of one of the world’s largest industries. We are excited at Arbinet’s vision of revolutionizing the way communications capacity is bought and sold and by the opportunity to help Arbinet create a leading exchange for global telecommunications services.”

“Arbinet provides the carrier community an unbeatable value proposition,” added Phil Summe, of Chase Capital Partners. “Buy-side Exchange members can eliminate procurement costs while getting the lowest price on each and every call. Sell-side members can eliminate marketing costs and literally fill up their networks with the click of a mouse. And all of Arbinet’s Members can outsource back-office processes to the Exchange. This end-to-end solution coupled with its neutral position, is why a growing number of the world’s leading carriers recognize Arbinet as the only Nasdaq-style Exchange for trading and delivering telecom capacity.”

Peter Roberts, Managing Director at BancBoston Ventures concluded, “As one of the early investors in Internet Capital Group, we’ve witnessed how business-to-business e-commerce companies have dramatically altered the landscape across all major industries. We believe the combination of Arbinet’s business model, their many years of experience managing other carriers’ networks, and their growing management team will be the catalyst of major change in the global communications services marketplace. We are very excited about being part of this unique B-to-B investment opportunity.”

About Arbinet

The Arbinet Global Clearing NetworkTM (AGCNTM) provides telephone service providers with real-time authentication, risk authorization, least cost routing, call placement, and settlement, on a transaction-by-transaction basis — allowing carriers to access the best rates and routing options without having to negotiate, contract, and interconnect separately with each supplier. AGCN members post for sale or purchase any capacity to any destination worldwide and attach specific parameters to define the quality conditions under which such trades are authorized. The AGCN then automatically matches available routes on a call-by-call basis, assuring carriers the lowest prices and highest quality available on the spot market. Arbinet is presently clearing and settling minutes for all types of communications companies including Internet Telephony service providers and a growing number of the world’s major carriers. Founded in 1994, the company has 52 employees and is headquartered alongside NASDAQ at 33 Whitehall Street in New York City with satellite offices in Florida, Tokyo and Hong Kong. (

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