May 12, 2014

magicJack Announces Strategic Commercial Agreement With Telefonica, S.A. to Sell magicJack Products and Services in Latin America

  • Agreement provides framework for entering multiple Latin American markets
  • Includes sale of both magicJack device and magicJack APP
  • Pilot to be launched in Second Half of 2014

WEST PALM BEACH, Fla. and JERUSALEM, May 12, 2014 (GLOBE NEWSWIRE) -- magicJack VocalTec Ltd. (Nasdaq:CALL), a leading cloud-based communications company, today announced that it has entered into a Strategic Commercial Agreement with Telefonica, S.A., a leading global telecommunications company. The agreement provides a framework under which magicJack products and services, including the magicJack device and the magicJack APP, can be sold in multiple countries throughout Latin America.

The agreement is subject to the completion of a country-specific agreement for each market. magicJack is currently working on a pilot to be launched in the second half of 2014. If the pilot yields positive results, magicJack plans to implement an accelerated rollout of magicJack offerings backed by aggressive marketing efforts in Central and South America towards the end of 2014 and into the beginning of 2015. The offerings will be co-branded with magicJack, with specific branding strategies to be set on a country-by-country basis.

Telefonica, S.A. has approximately 185 million mobile customers and 25 million landline customers in Latin America, and generated approximately $58 billion in consolidated annual revenues in 2013.

"This agreement is a significant first step in implementing our international distribution strategy," said magicJack VocalTec President and CEO Gerald Vento. "Through our longstanding relationship with senior leadership at Telefonica, we have the opportunity to significantly accelerate the near-term adoption of our device and APP in key markets in Latin America. Our focus is now squarely on making sure we finalize plans for the pilot. While it is too early to project financial results, based on our assessment of the markets so far, we are confident that we and Telefonica can introduce strong offerings into the marketplace at compelling price points."

About magicJack VocalTec Ltd.

magicJack VocalTec Ltd. (Nasdaq:CALL), the inventor of magicJack and a pioneer in voice over IP (VoIP) technology and services, is a leading cloud communications company. With its easy-to-use, low cost solution for telecommunications, the Company has sold more than 10 million award-winning magicJack devices, now in its third generation, has millions of downloads of its free calling app, and holds more than 30 technology patents. magicJack is the largest-reaching CLEC (Competitive Local Exchange Carrier) in the United States in terms of area codes available and number of states in which it is certified.

Forward Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release, including statements about the future impact of entering into the Strategic Commercial Agreement with Telefonica, S.A., the completion of country-specific agreements, the selling of the magicJack device and the magicJack APP in Latin America, and the timing and launch of a pilot program as well as the rollout to multiple markets, are forward-looking statements. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include, among other things: our inability to develop and complete country-specific business plans and agreements, our inability to launch the pilot program within the contemplated timing or achieve the expected results from the pilot program, our inability to rollout the offerings to additional markets even if the pilot program is successful, changes to our business resulting from increased competition; any operational or cultural difficulties encountered as a result of entering into the Strategic Commercial Agreement with Telefonica, S.A.; unexpected costs, charges or expenses resulting from the implementation of the Strategic Commercial Agreement; our ability to develop, introduce and market innovative products, services and applications; our customer turnover rate and our customer acceptance rate; changes in general economic, business, political and regulatory conditions; availability and costs associated with operating our network; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies; the degree of legal protection afforded to our products; changes in the composition or restructuring of us or our subsidiaries and the successful completion of acquisitions, divestitures and joint venture activities; and the various other factors discussed in the "Risk Factors" section of our Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

magicJack® is a registered trademark of magicJack VocalTec Ltd. All other product or company names mentioned are the property of their respective owners.

CONTACT: Seth Potter

         Investor Relations

         561-749-2255

         ir@vocaltec.com

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Source: magicJack VocalTec Ltd.

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