Arelnet i-Tone Prime VoIP Gateway Leads 50% Revenue Increase in Third Quarter of 2000

Arelnet i-Tone Prime VoIP Gateway Leads 50% Revenue Increase in Third Quarter of 2000

Business Editors/High-Tech Writers

YAVNE, Israel–(BUSINESS WIRE)–Nov. 16, 2000

Arel Communications (Nasdaq:ARLC)

Arelnet Ltd (TASE:ARNT), a leading provider of VoIP telephony systems, announced today an increase in revenues to $1.9 million in the third quarter of 2000, a rise of 50% as compared to the year’s second quarter.

The increase was driven by sales of Arelnet’s flagship product, the i-Tone Prime, which exceeded $1,000,000 during the reporting quarter.

Revenues for the first nine months of 2000 rose by 127% to $4.34 million compared to the same period in 1999. Arelnet’s net loss for the first three quarter of 2000 reached $2.88 million as opposed to a net loss of $0.98 million during the corresponding period in 1999. An increase of 28% in R&D expenditures and a rise of just over 100% in sales and marketing costs, primarily due to the i-Tone Prime’s development and introduction, were the main reasons for the increase in net loss.

“We continue to be very satisfied with the company’s performance and the market’s increasing interest in the i-Tone Prime and its associated products,” said Rachel Bennun, Arelnet CEO. “During the quarter we joined in new strategic partnerships around the world and in the United States. We believe that 2000 will be a banner year for Arelnet and look forward to increasing our share of the rapidly emerging IP equipment marketplace with our powerful, reliable and feature laden IP communications platforms.”

Arelnet provides carrier grade VoIP systems, for carriers, NextGen telcos and ISPs. Its i-Tone Prime Carrier Grade Gateway architecture includes a fully redundant, hot swappable gateway supporting up to 24 T1/E1 trunks per shelf and up to 5,000 ports per rack. It was introduced during the second quarter of 2000.

About Arelnet Limited

Arelnet is a leading provider of Voice over IP (VoIP) systems, specializing in carrier grade solutions. Arelnet’s i-Tone Prime suite of products is designed to deliver Real Time voice & fax as well as value added services — all over IP networks. Arelnet is publicly traded on the Tel Aviv Stock Exchange (TASE:ARNT). Arelnet’s major shareholders are Keppel Telecommunications & Transportation (SING:KEPPEL T&T), Arel Communications and Software Ltd. (NASDAQ:ARLC), Nortel Networks, ELRON (NASDAQ:ELRNF), and Poalim Communications (TASE:POCO). For further information please visit our website at www.arelnet.com.

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