Tuesday July 21, 12:00 pm Eastern Time
Company Press Release
ITXC Corp and TeleNova Comunicacoes Ltda. Establish IP Telephony
Company to Bring New Phone Calling Choices to Brazil and Entire
Mercosur Region
SAO PAULO, Brazil and NORTH BRUNSWICK, N.J.--(BUSINESS WIRE)-- July 21, 1998--
ITXC Comunicacoes Ltda. Expected to Strengthen Communication
Link Between NAFTA and Mercosur
Privatization of Telebras and deregulation are expected to lead to a rapid increase in telephone penetration in Brazil from
today's 12%.
Many of these new phones and new phone users will be placing calls over the Internet according to ITXC Corp of the United
States and TeleNova Comunicacoes Ltda. of Brazil.
The companies today announced the formation of a jointly-owned Brazilian company, ITXC Comunicacoes Ltda, which will
make the option of Internet calling available in Brazil, Argentina, Chile, Paraguay and Uruguay (countries in or associated with
the Mercosur trade region of South America) starting in the third quarter of 1998.
''Internet telephony is the first use of the Internet by people who don't have computers,'' according to Tom Evslin, ITXC Corp
Chairman and CEO. ''Routing calls over the Internet is cheaper in most cases than using the traditional circuit switched
network. Thanks to the Internet and IP networks, business and consumers in Mercosur will be able to afford to call further and
talk longer.''
Although Internet (often called IP telephony) telephony originally required a computer, calls from any ordinary phone to any
other ordinary phone can now be routed over the Internet as easily as calling with a prepaid calling card and more easily than
using a call-back service.
ITXC Corp is the leading wholesaler of IP telephony services worldwide. Its worldwide presence assures callers from
Mercosur of the best prices on calls to anywhere in the world and allows callers from all over the world to make inexpensive
calls to Mercosur.
TeleNova is planning to offer enhanced telecommunications services directly to consumers and businesses in the region
including IP telephony and unified messaging. The new company, ITXC Comunicacoes Ltda. is headquartered in Sao Paulo.
In a joint press conference held this morning in Sao Paulo, Claudio Collado, TeleNova CEO and Evslin announced the signing
of an agreement between TeleNova and ITXC and the formation of ITXC Comunicacoes Ltda. The new company will begin
operation immediately. Like ITXC, ITXC Ltda will be initially using IP gateways from both Lucent Technologies (Nasdaq: LU
- news) and VocalTec (Nasdaq: VOCLF - news).
Collado will serve as acting CEO of the new company, ITXC Ltda. He has extensive experience in networking and
telecommunications. He began his career at IBM where he worked for 25 years. After leaving IBM, he was marketing director
of MANDIC Internet, one of the leading Brazilian ISPs.
In 1998, he joined TeleNova Ltda., a subsidiary of TeleNova Corp. TeleNova Ltda. is headquartered in New York. Its
charter is to offer IP telephony to emerging countries and regions, like Mercosur. Investors in TeleNova include Brazilian and
American entrepreneurs such as the Gerdau Family, Sagres Capital, and other Brazilian investors.
The acting CFO of ITXC Ltda is Ed Jordan who is also CFO of ITXC Corp. Before joining ITXC, Jordan was CFO of
Dialogic Corp and took that company through a very successful U.S. IPO.
By 3Q98, ITXC Ltda. will be operating a high-quality IP telephony service linking Rio, Brasilia, Sao Paulo, the US, and the
rest of the world. Service will be extended to the rest of Mercosur later in 1998 and early 1999.
As wholesale providers of IP telephony, ITXC and the new Mercosur subsidiary do not sell directly to end users; instead they
sell the ability to complete calls worldwide to prepaid calling card companies, telephone companies, Internet service providers
and others who provide calling services directly to businesses and consumers.
ITXC Ltda intends to be the leading provider of wholesale IP telephony in Mercosur since it has the advantage of both the
ITXC worldwide footprint and the experience of TeleNova and its principals in Mercosur technology and communications.
Collado states that ''TeleNova is founded on the premise that IP telephony will be a key part of meeting the need of the
expanding Mercosur economies for improved communications both within the region and with the rest of the world. Our
backbone will be built for IP from the ground up. ITXC Corp is the ideal partner for us because they provide both expertise in
IP telephony and a worldwide network of connections. We expect a significant flow of traffic between NAFTA countries and
Mercosur almost immediately.''
''Brazil is one of the fastest growing telecommunications markets in the world,'' says ITXC's Evslin. ''We expect to see calling
volumes skyrocket as a consequence of both economic growth and the greater efficiency of a privatized industry. Since the
unmet communications need is so great, new types of service like IP telephony will grow much faster than in countries where
most of the infrastructure to meet current needs already exists.
''Our new subsidiary is positioned for tremendous growth here and gives us a commanding ability to build traffic back and forth
between North and South America.''
Nelson Proenca, a Federal Representative for the Rio Grande do Sul district of Brazil and a primary force in the founding of the
Mercosur trade region endorses the concept by adding that ''The IP revolution is a technology shift that will further help
integrate the Mercosur countries and NAFTA and improve the local economies.''
About TeleNova:
TeleNova Comunicacoes Ltda., headquartered in Sao Paulo, was founded to provide the corporate market in Brazil and the
other Mercosur countries with IP (Internet Protocol) technology-based communications services.
The company is a subsidiary of TeleNova Corporation, which was created in 1998 in New York to explore new and advanced
telephony services in emerging markets such as Mercosur. Among the company shareholders are the Gerdau Family, Sagres
Capital and other Brazilian investors.
As of August, TeleNova will provide the Brazilian market, via ITXC Ltda., with differentiated communication services,
especially those related to IP Telephony and unified messages.
About ITXC Corp:
ITXC was founded by Tom Evslin in August of 1997 with initial seed funding from AT&T and VocalTec. Prior to founding
ITXC, Evslin founded and ran AT&T WorldNetsm Service, AT&T's initial entry into the Internet business. Evslin joined
AT&T from Microsoft where he was responsible for the products which are now known as the Microsoft BackOffice(tm).
ITXC recently closed a $10 million dollar round of venture funding. New investors included Intel, Chase Capital, Spectrum
Equity, Flatiron Partners, and Polaris. The company sells wholesale services globally to the new Internet or IP telephony
service providers such as routing, authentication, and settlement.
ITXC Corp's network provides IP telephony coverage of approximately 30 non-U.S. locations around the world. It has IP
access to many additional locations through its pioneering of peering arrangements with other IP telephony carrier networks.
Through a combination of IP and traditional phone service, ITXC can complete calls to any phone in the world at an attractive
price.
Contact:
ITXC Corp.
Barbara Callaway, Marketing Manager
732/940-4333, ext. 122
bcallaway@itxc.com
www.itxc.com
or
Pimenta Communications, Sao Paulo, Brazil
Regina Pimenta, PR, +55 011 3064 6220
Pimentac@uol.com.br
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