Arbinet Revises 2005 OutlookArbinet Revises 2005 Outlook

NEW BRUNSWICK, N.J. -- Arbinet-thexchange, Inc. (Nasdaq: ARBX - News), the world's leading electronic market for trading, routing and settling communications capacity, today announced revised outlook for the full year 2005.

Over the last six weeks, Arbinet has experienced several changes in Member trading on its exchange. Specifically, Arbinet has experienced a shift in the mix of geographic markets traded by its Members. During the same period, there was an increase in the mobile traffic minutes traded on Arbinet's exchange. Traffic to some markets, like Mexico as an example, is characterized by long average call durations and ranges from twelve to nineteen minutes per call. This contrasts with the relatively shorter length of mobile calls, which frequently average fewer than three minutes per call. The combination of the shift in the traffic mix and increase in mobile minutes has led to a decrease in the average number of minutes per call transacted on Arbinet's exchange. As a result of the shift to shorter calls, minutes growth did not keep pace with the 30% growth in completed calls Arbinet experienced in the period January through May, 2005 compared with the same period of 2004. In addition, in May, two large buyers reduced their trading after their credit lines were suspended by Arbinet.

Assuming these same trends for the remainder of 2005, the Company now expects that fee revenues for the full year 2005 will be in the range of $46 million -- $50 million, with net income in the range of $3 million -- $6 million.

Based on preliminary information, the Company expects fee revenues for the second quarter 2005 will be in the range of $11.0 million -- $11.5 million, with net income in the range of $0.5 million -- $1.0 million. Arbinet said it expects average daily completed calls in the second quarter will be the highest of any quarter in its history and through May, completed calls were 30% greater than the same period in 2004. The Company completed 591 million calls during the first five months of 2005 compared to 456 million for the comparable period of 2004. The average call duration on thexchange is expected to be 3.9 minutes per call in the second quarter of 2005, compared to 4.2 minutes per call in the second quarter of 2004 and 4.4 minutes per call in the first quarter of 2005.

The DirectAxcess(SM) branded trading service, introduced on May 17, is expected to represent 2% of average daily trading volume by the end of the second quarter. The average call duration for DirectAxcess(SM) has averaged 7.2 minutes in the second quarter, which is 85% more than the expected overall average call duration for the second quarter of 3.9 minutes.

Curt Hockemeier, President and Chief Executive Officer of Arbinet, commented, "While we are pleased that Arbinet achieved a record for average daily completed calls in April and May 2005, the average number of minutes per call transacted on thexchange declined due to a change in the mix of geographic markets traded and an increase in mobile traffic minutes traded by Members. Our exchange is a spot market and fluctuates with geographic shifts as certain regions are characterized by longer call durations than other regions. When there is a shift in the geographic mix it can have a sudden effect on the average number of minutes per call transacted. With regard to mobile traffic, this has been one of the fastest growing communications segments worldwide for the past few years. This is a primary focus for Arbinet and our exchange members. From a trend standpoint, mobile calls transacted are typically higher in volumes with shorter call durations. The record call volumes we achieved in April and May reflect this trend and Arbinet's increasing penetration of this segment."

"Overall, we remain positive about Arbinet's long-term growth prospects," continued Hockemeier. "Our confidence is based on continued demand for our exchange platform, the strength of our customer base -- which includes 9 of the world's 10 largest carriers -- the scalability of our model and Arbinet's growth opportunities globally. We are the leading provider establishing a new market. As such, we expect continued fluctuations as customer usage varies, mobile calls continue to grow as a percentage of our traffic and customers shift geographic market trading. With that said, we believe the growth of our DirectAxcess(SM) service, with its longer call durations, will combine with the overall growth in completed calls to stabilize longer term growth in the voice exchange business."

Arbinet-thexchange Inc.