Teleglobe International Holdings Ltd Announces Second Quarter 2005 Results

Teleglobe International Holdings Ltd (NASDAQ:TLGB), a
leading provider of international telecommunications services to
Internet service providers and to fixed and mobile network operators,
announced today unaudited second quarter 2005 results for the period
ended June 30, 2005.
   Second quarter 2005 revenue was $239.2 million versus $255.3
million in the first quarter of 2005 and $230.7 million in the second
quarter of 2004. Net loss for second quarter 2005 was $0.4 million
versus $8.4 million in the first quarter of 2005 and $3.8 million in
the second quarter of 2004. Net loss attributable to common
shareholders for the second quarter of 2005 was $0.4 million, or
$(0.01) per share, versus $8.4 million, or $(0.22) per share, in the
first quarter of 2005 and $5.4 million, or $(0.17) per share in the
second quarter of 2004. Prior period financials are not comparable as
ITXC Corp. (ITXC) results were included for the full period in the
second and first quarters of 2005 but for only one month of the
year-ago period. The merger with ITXC and related transactions were
consummated on May 31, 2004. As of June 30, 2005, the company had
39,108,492 shares outstanding.
   Second quarter 2005 adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) were $9.8 million including a
$1.6 million loss from foreign exchange translations versus $3.9
million including a $1.9 million loss from foreign exchange
translations in the first quarter of 2005. Second quarter results also
include a $2.2 million pretax gain on the sale of a Vancouver facility
associated with the company's plan to reduce operating expenses. The
second quarter also includes the impact of major favorable settlements
with carriers. The first quarter figure includes integration expenses
and professional fees incurred in connection with the Company's
internal Foreign Corrupt Practices Act ("FCPA") investigation of $2.0
million. EBITDA is a non-GAAP concept (see non-GAAP financial data
footnote in this press release).
   Liam Strong, president and CEO of Teleglobe, stated, "During the
second quarter, Teleglobe continued to execute on its plan to create a
more productive, efficient operating platform from which to leverage a
higher-growth revenue mix over time. Voice and data revenue were
affected by price erosion in the quarter while our higher-margin value
added services performed above expectations. Volumes in the voice
business were hampered by the seasonally slower period and by
integration completion late in the quarter; data volume growth was
consistent with prior quarters' gains. In May, we successfully
completed the final integration stages of our international TDM voice
network with ITXC's global VoIP network, unifying routing and network
traffic management into one voice IP network. The benefits of unified
routing, helped by a lower percentage of voice revenue in the mix and
the timing of voice settlements, contributed to sequential gross
margin expansion and EBITDA growth."
   Mr. Strong concluded, "Looking into the second half of the year,
we continue to focus on driving volume growth and new product
introductions while channeling a portion of the integration synergies
we have generated into programs to increase our productivity and
profitability."

   Non-GAAP Results

   EBITDA (Earnings before interest, taxes, depreciation, and
amortization) for second quarter 2005 was $9.8 million versus $3.9
million in the first quarter of 2005 and $4.8 million in the second
quarter of 2004. EBITDA is a non-GAAP concept, differing from GAAP
measures in that it excludes net interest expense, taxes, depreciation
and amortization. A more detailed reconciliation of the differences
between GAAP and non-GAAP results is included in the financial tables
in this press release.

   Non-GAAP Financial Data

   We are presenting EBITDA (Earnings before interest, taxes,
depreciation and amortization) and Gross Margin because management
considers them to be important supplemental measures of our
performance and believes that they are frequently used by interested
parties in the evaluation of companies in our industry. However,
EBITDA and Gross Margin have limitations as analytical tools, and you
should not consider them in isolation, or as a substitute for analysis
of our results as reported under GAAP. Some of these limitations
include the following:

   --  EBITDA does not reflect cash expenditures, future requirements
        for capital expenditures, or contractual commitments;

   --  EBITDA does not reflect changes in, or cash requirements for,
        working capital needs;

   --  EBITDA does not reflect the significant interest expense, or
        the cash requirements necessary to service interest or
        principal payments, on debt;

   --  Although depreciation and amortization are non-cash charges,
        the assets being depreciated and amortized will often have to
        be replaced in the future, and EBITDA does not reflect any
        cash requirements for such replacements;

   --  EBITDA reflects the impact on earnings of charges resulting
        from matters we consider not to be indicative of our ongoing
        operations; and

   --  Other companies in our industry may calculate EBITDA and Gross
        Margin differently than we do, limiting their usefulness as a
        comparative measure.

   --  The Gross Margin calculation excludes any depreciation or
        amortization relating to property, equipment and intangible
        assets required to generate revenues.

   Because of these limitations, we rely primarily on the GAAP
results and use EBITDA and Gross Margin only as supplemental measures.
   Adjusted EBITDA is a further supplemental measure of our
performance. We compute Adjusted EBITDA by adjusting EBITDA to
eliminate the impact of a number of items that management does not
consider indicative of our ongoing operating performance. You are
encouraged to evaluate each adjustment and the reasons we consider it
appropriate for supplemental analysis. In addition, in evaluating
Adjusted EBITDA, you should be aware that in the future we may incur
expenses similar to the adjustments in this presentation. The
presentation of Adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by unusual or
nonrecurring items.

   Subsequent Event

   On July 25, 2005, Teleglobe announced it entered into a definitive
agreement to be acquired by Videsh Sanchar Nigam Limited, VSNL (NYSE:
VSL), India's leading provider of international communications and
Internet services. The transaction, which is subject to regulatory
approvals, approval of Teleglobe's shareholders, and other customary
closing conditions, is structured as an amalgamation of Teleglobe with
a newly formed subsidiary of VSNL. Pursuant to the amalgamation,
Teleglobe shareholders will receive consideration of $4.50 per common
share in cash.
   Teleglobe plans to file with the SEC and mail to its shareholders
a proxy statement in connection with the transaction. Investors should
carefully review Teleglobe's proxy statement with respect to the
proposed transaction when it is filed with the SEC before making any
decision concerning the proposal offer. The proxy statement will
contain important information about Teleglobe, VSNL, the transaction
and related matters. Once filed, investors will be able to obtain
these documents and other relevant documents for free at the SEC web
site www.sec.gov, and at Teleglobe's web site, www.teleglobe.com.

   Participants in Solicitation

   Teleglobe, VSNL and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Teleglobe's shareholders in connection with the proposed
acquisition information concerning Teleglobe's participants in the
solicitation as set forth in the Teleglobe's form 10-K filed with the
SEC on March 17, 2005. Information concerning VSNL's participants in
the solicitation is set forth in the form 20-F filed by VSNL with the
SEC on September 29, 2004 and the forms 6-K filed by VSNL with the SEC
on October 27, 2004, April 11, 2005, May 10, 2005, June 7, 2005 and
July 25, 2005.

   About Teleglobe:

   Teleglobe is a leading provider of international voice, data,
Internet and mobile roaming services with over 50 years of industry
expertise in international telecommunications. Teleglobe became a
public company trading on the Nasdaq under the symbol TLGB with the
acquisition of Voice over IP (VoIP) network leader ITXC Corp. on June
1, 2004.
   Teleglobe owns and operates one of the world's most extensive
telecommunications networks, reaching over 240 countries and
territories with advanced voice, mobile, and data services. Teleglobe
is the carrier of choice to more than 1,400 wholesale customers
representing the world's leading telecommunications, mobile operators
and Internet service providers.
   With an annual run-rate of over 13 billion minutes, and a
significant portion of the world's Internet traffic, Teleglobe's
network is consistently ranked among the most robust and reliable,
performing at the high end of industry standards. Detailed information
about Teleglobe is available on the company's web site at
www.Teleglobe.com.

   Forward-looking Statements

   Teleglobe has included in this press release forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including all statements concerning future or
expected events or results.
   Actual results could differ materially from those projected in the
companies' forward-looking statements due to numerous known and
unknown risks and uncertainties, including, among other things, the
risks and uncertainties described in the Form 10-Q that was filed by
Teleglobe on August 10, 2005, as well as other Teleglobe periodic
filings with the Securities and Exchange Commission.

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Teleglobe International Holdings Ltd - Selected Financial
Highlights for the periods indicated (Unaudited)(USD$, 000's):

                                         Q2-2005   Q1-2005   Q2-2004

Consolidated Statement of Operations -
 Selected Information
                                        -----------------------------

Revenues                                $239,173 $  255,307 $230,651

Telecommunication expenses               169,596    189,580  169,370
Network expenses, exclusive of
 amortization and Depreciation            22,729     22,779   24,068
                                         -------- ---------- --------
 Total telecommunication and network
  expenses                              $192,325 $  212,359 $193,438

Selling, general & administrative, bad
 debt expenses, stock based compensation,
  restructuring charges, foreign
   exchange loss (gain) and other 
    income                              $ 37,037 $   39,046 $ 32,445


Net (loss) income                       $   (401)$   (8,445)$ (3,776)



Teleglobe International Holdings Ltd - Selected Financial
Highlights for the periods

Consolidated Balance Sheet as at the Period       June 30,  December
 Indicated - Selected Information                   2005    31, 2004
                                                  --------- ---------

Cash, Marketable Securities and Restricted Cash   $ 21,447  $ 34,060
Accounts Receivable                                213,869   210,588
Other Current Assets                                14,933    10,189
                                                   --------  --------
Total Current Assets                               250,249   254,837

Property and Equipment                             131,439   134,083
Intangible Assets                                  144,179   143,231
Other Non-Current Assets                            22,095    21,638
                                                   --------  --------
Total Assets                                      $547,962  $553,789

Accounts Payable and Accrued Liabilities          $279,012  $275,645
Other Current Liabilities                            6,545     6,065
Current Portion of Senior Notes Payable             25,000        --
                                                   --------  --------
Total Current Liabilities                          310,557   281,710

Other Non-Current Liabilities                       13,011    13,929
Senior Notes                                        75,000   100,000
Total Equity                                       149,394   158,150
                                                   --------  --------
Total Liabilities and Shareholders' Equity        $547,962  $553,789



Teleglobe International Holdings Ltd - Selected Financial
Highlights for the periods indicated (USD$, 000's)(Unaudited):

*Reconciliation of EBITDA to GAAP Measure   Q2-2005 Q1-2005  Q2-2004
 for the periods indicated
---------------------------------------------------------------------

Net (loss) income                           $ (401) $(8,445) $(3,776)
Add:
  Interest expense, net                      2,101    3,932    3,821
  Income tax expense (recovery)               (299)    (287)  (2,345)
  Depreciation                               5,762    6,247    5,108
  Amortization of intangible assets          2,648    2,455    1,960
                                             ------  -------  -------
EBITDA                                      $9,811  $ 3,902  $ 4,768
Add:
  Integration costs                              -    1,331    4,800
  Professional fees incurred in connection
   with Foreign Corrupt Practices Act
     investigation                               -      664        -

Adjusted EBITDA                             $9,811  $ 5,897  $ 9,568
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   The EBITDA for the three months ended June 30, 2005 includes a
non-recurring gain of $2.2 million relating to the disposal of the
Burnaby Vancouver Station, $3.0 million of revenue due to favorable
settlement agreements with certain carriers and $0.9 million of
similar favorable agreements in network expenses. Additionally, for
the three months ended June 30, 2005, the Company's telecommunication
expenses were reduced by major favorable settlements with certain
carriers for approximately $2.7 million compared to $3.0 million in
the first quarter of 2005.
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*Reconciliation of Gross Margin to GAAP   Q2-2005   Q1-2005  Q2-2004
 Measure for the periods indicated
---------------------------------------------------------------------

(Loss) income before income taxes          $  (700) $(8,732) $(6,121)
Add:
  Interest expense, net and other income      (122)   3,956    3,754
  Foreign exchange loss (gain)               1,594    1,926     (179)
  Depreciation                               5,762    6,247    5,108
  Amortization of intangible assets          2,648    2,455    1,960
  Bad debt expense (recovery)                  221     (847)     497
  SG&A, stock based compensation and
   restructuring charges                    37,445   37,943   32,194
                                            -------  -------  -------
Gross Margin                               $46,848  $42,948  $37,213
                                            -------  -------  -------
Gross Margin as a Percentage of Revenue       19.6%    16.8%    16.1%

Revenue Information

The following table presents relevant revenue-related information
for the periods indicated for Teleglobe International Holdings Ltd
(Unaudited)

                                              Three   Three   Three
                                             Months  Months  Months
                                              Ended   Ended   Ended
                                               June   March    June
                                                 30,     31,     30,
                                               2005    2005    2004
                                              ------- ------- -------

Revenues per line of business (in millions of
 U.S. dollars)
 Voice - transport                              $190    $206    $183
 Data - transport                                 25      26      26
 Value - added services                           24      23      22
                                              ------- ------- -------

 Total                                          $239    $255    $231

Total revenues excluding Bell Canada(1)
 revenues                                       $215    $228    $211

Percentage of revenues from Bell Canada(1)      10.1%   10.6%    8.6%

Minutes of traffic (in millions)
 Voice - transport                             3,328   3,432   2,444
 Other                                            70      63      53
                                              ------- ------- -------

 Total                                         3,398   3,495   2,497

Average voice revenue per minute              $0.057  $0.060  $0.075

Geographic distribution of revenues
  Asia                                             7%      8%      9%
  Canada                                          15%     15%     11%
  Europe                                          32%     32%     28%
  USA                                             31%     31%     35%
  Latin America                                    4%      4%      4%
  Other                                           11%     10%     13%
                                              ------- ------- -------
Total                                            100%    100%    100%


(1) Bell Canada is Canada's largest telecommunications company.
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