deltathree Reports Third Quarter 2010 Financial Results

Mr. Effi Baruch, Chief Executive Officer, President and Senior Vice President of Operations and Technology of deltathree, stated, "Our third quarter 2010 financial results were highlighted by our second consecutive quarter of sequential revenue growth, as deltathree's expanding portfolio of digital voice and video communications solutions gained additional traction with service provider and consumer customers. Sequential top line growth was matched with a sequential reduction in our quarterly net loss, as operating efficiency measures across the company yielded improvements in our cost structure."

The product development front

"On the product development front, during the third quarter we launched several new mobile VoIP offerings aimed at penetrating the vast and growing market for cellular VoIP solutions. Our recently launched joip Mobile phone application offers cellular customers a new and flexible way to make low cost mobile calls over GSM, CDMA as well as WiFi networks. Building on the successful launch of joip Mobile, deltathree signed a sales agency agreement with ACN, Inc. for deltathree's mobile phone application. ACN is the world's largest direct seller of telecommunications and essential services for residential and business customers and will be offering a private label version of our joip Mobile phone application through thousands of independent representatives in ACN's North American distribution network under the ACN Mobile World brand. Cellular operating systems supported by joip Mobile and ACN Mobile World include the iPhone, Google Android and Nokia Symbian, with support for the Windows Mobile operating system and BlackBerry expected soon."

"During the third quarter we also strengthened the ranks of our senior management team with two key appointments. Arie Rand assumed the roles of Chief Financial Officer and Treasurer, bringing deep expertise in effectively managing financial, strategic and business activities for growth-oriented technology companies trading in the global capital markets. We also welcomed to deltathree Todd Stone as Vice President of Business Development and Sales, bringing more than 13 years of experience in selling, marketing and promoting leading edge communications solutions to major operators and carriers in North America, Europe, Latin America, Asia and Africa. Amongst other things, Todd will be leading the company in building up our affiliate program in which affiliates will locate and bring new subscribers to our joip Mobile service. These appointments bolster deltathree's leadership team as well as our ability to drive sales and increase our share in the global market for digital voice and video as well as mobile VoIP communications offerings," concluded Mr. Baruch.

Founded in 1996, deltathree, Inc. is a global provider of video and voice over Internet Protocol (VoIP) telephony services, products, hosted solutions and infrastructures for service providers, resellers and direct consumers. Supporting tens of thousands of active users around the world, deltathree serves customers through its service provider and reseller channel and its direct-to-consumer channel. deltathree's advanced solutions offer service providers and resellers a full spectrum of private label IP-based digital voice and video products and services, as well as a back-office suite of services. Utilizing advanced Session Initiation Protocol (SIP) technology, deltathree provides all the components to support a complete VoIP service deployment. deltathree's direct-to-consumer channel consists of the joip Mobile, joip and iConnectHere direct-to-consumer offerings.