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                                                                   Exhibit 10.25

                                 Net2Phone, Inc.


                                520 Broad Street


                            Newark, New Jersey 07102










                                             October 29, 2003

IDT Corporation
520 Broad Street
Newark, NJ 07102
Attn:  James A. Courter, CEO

Winstar Communications, LLC
520 Broad Street
Newark, NJ 07102
Attn:  E. Brian Finkelstein, CEO


          Re: Cable Telephony

Dear Jim and Brian:

         I am writing to you with the intent of formalizing the terms of our
ongoing cooperation which began on or about March 15, 2003 and which has
included (i) the joint marketing of our local and long distance telephony
services, facilities and technologies to foreign and domestic cable operators,
(ii) the development of alternative business models and financing vehicles
related to such marketing activities and the sharing of information related
thereto, and (iii) the coordination of our business activities in an effort to
pursue business opportunities in the cable telephony market to our mutual
advantage. This letter agreement sets forth the terms of a formal arrangement
pursuant to which Winstar Communications, LLC, a Delaware limited liability
company ("Winstar"), which is a subsidiary of IDT Corporation, a Delaware
corporation ("IDT"), will provide services to Net2Phone Cable Telephony, LLC, a
Delaware limited liability company ("NCT"), which is a subsidiary of Net2Phone,
Inc., to facilitate NCT's provision of cable telephony service to consumers and
cable operators worldwide.

         1. Overall Structure and Terms. The basic terms of the arrangement are
set forth in the Term Sheet attached hereto as Exhibit A, which is incorporated
herein by reference.

         2. Term Sheet Binding. IDT, WINSTAR and NCT each agree that this letter
agreement is intended to establish a binding agreement between them and agree to
negotiate in good faith towards execution of definitive documentation on the
basis of the terms set forth in the Term Sheet, including an agreement between
Winstar and NCT, an appropriate guaranty agreement between IDT and NCT, an
appropriate guaranty agreement between Net2Phone and IDT and Winstar and an
appropriate security and escrow agreement and other appropriate documents
relating to the Shares as provided for in the Term Sheet, upon the execution of
which this letter agreement shall be terminated. Each party acknowledges that
the other party may incur expenses and take other actions in reliance on the
mutual agreement of the parties to negotiate in good faith as provided in the
immediately preceding sentence.


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         3. Governing Law. This letter agreement shall be governed by and
construed in accordance with the internal laws of the State of New Jersey
applicable to such agreements made and to be performed entirely within such
State.

         4. Agreement and Amendments. This letter agreement constitutes the
understanding and agreement between the parties hereto and their affiliates with
respect to the subject matter herein and supersede all prior or contemporaneous
agreements, representations, warranties and understandings of such parties. No
promise, inducement, representation or agreement, other than as expressly set
forth herein or therein, has been made to or by the parties hereto. This letter
and its exhibits may be amended only by a written agreement signed by the
parties.

         5. Construction. This letter shall be construed according to its fair
meaning and not strictly for or against either party notwithstanding that it may
have been drafted by one party. The captions herein are for convenience only and
shall not be considered a part of this letter agreement for any purpose,
including, without limitation, the construction or interpretation of any
provision hereof.

         7. Beneficiaries. Nothing expressed or implied in this letter is
intended, or shall be construed, to confer upon or give any person or entity
other than the parties hereto and their respective affiliates, successors and
permitted assigns, any rights or remedies under or by reason of this letter.

         8. Counterparts. This letter agreement may be signed in multiple
counterparts, all of which shall together be considered one and the same
agreement.

         9. Enforceability. If any portion or provision of this letter agreement
shall to any extent be declared invalid, illegal or unenforceable by a court,
then the remainder of this letter agreement shall not be affected thereby, and
each portion or provision of this letter agreement shall be valid and
enforceable to the fullest extent permitted by law. Upon such determination that
any portion or provision of this letter agreement is invalid, illegal or
unenforceable, the parties shall negotiate in good faith to modify this letter
agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to that end that the transaction contemplated
hereby is fulfilled to the fullest extent possible.

                                      * * *


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         If you agree with the terms and conditions set forth above, please so
indicate by signing a copy of this letter in the space indicated below and
returning it to us.

                                             Sincerely,

                                             NET2PHONE INC.




                                             By:   /s/ Stephen M. Greenberg
                                                  ------------------------------
                                                  Name: Stephen M. Greenberg
                                                  Title: Chief Executive Officer

                                                 Date: October 29, 2003
                                                      -------------------------

Accepted and Agreed:

IDT CORPORATION




By: /s/ James A. Courter
    --------------------------------
    Name: James A. Courter
    Title: Chief Executive Officer



Date: October 29, 2003
     ------------------------------


WINSTAR COMMUNICATIONS, LLC




By:    /s/ E. Brian Finkelstein
   ----------------------------------
       Name:  E. Brian Finkelstein
       Title: Chief Executive Officer



Date: October 28, 2003
     --------------------------------


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                                    Exhibit A
                                    ---------

                                   TERM SHEET

This Term Sheet is attached to a letter agreement between Net2Phone INC.
("Net2Phone"), Winstar Communications, LLC and IDT Corporation, dated October ,
2003, and is subject to all of the terms and conditions thereof.

Scope of Agreement:        Net2Phone Cable Telephony, LLC, a Delaware limited
                           liability company and a wholly-owned subsidiary of
                           Net2Phone (" NCT") and Winstar Communications, LLC, a
                           Delaware limited liability company ("Winstar") which
                           is a subsidiary of IDT Corporation, a Delaware
                           corporation ("IDT"), desire to enter into an
                           agreement to facilitate NCT's provision of cable
                           telephony service to consumers and cable operators
                           worldwide ("Agreement"). Under the Agreement, Winstar
                           will provide NCT, subject to and consistent with the
                           capacity of Winstar's infrastructure, with, among
                           other things, network access, termination,
                           origination and other related services. IDT will
                           guaranty the performance by Winstar of its
                           obligations under the Agreement and will enter into a
                           guaranty agreement with NCT to such effect. To the
                           extent that the Winstar infrastructure is presently
                           unable to support and provide the required services,
                           Winstar shall immediately delegate all or part of its
                           obligations under the Agreement (and assign all or
                           part of its related rights) to IDT or IDT Telecom,
                           Inc., a Delaware corporation, or one or more other
                           direct or indirect IDT subsidiaries (collectively
                           referred to as "IDT Telecom") but only to the extent
                           that IDT or IDT Telecom have the present capacity to
                           carry out such obligations and IDT shall cause such
                           entity or entities to accept such delegation and to
                           render the required services under the terms and
                           conditions provided for herein. No such delegations
                           shall in any way relieve Winstar or IDT of their
                           obligations under the Agreement, and nothing herein
                           shall require Winstar, IDT or IDT Telecom to provide
                           or procure any services that they do not otherwise
                           have the present capacity or capability to provide.

Scope and Mission of
NCT:                       NCT will acquire, develop, design, offer, promote and
                           sell cable telephony systems and services which
                           incorporate the planning and deployment of telephony
                           service, the integration of the network elements and
                           back office systems and processes, the deployment of
                           proprietary real-time service assurance capabilities
                           and the ongoing operational support required to
                           maintain a telephony operation, and will obtain all
                           necessary approvals, certificates and licenses
                           required by applicable law for it to do so. Customers
                           may include cable multiple systems operators
                           ("MSOs"), residential and commercial end-users and
                           others to be determined. It is presently contemplated
                           that NCT will make its cable telephony services
                           available via (i) a "Franchise Model" whereby NCT
                           will obtain indefeasible rights of use or similar
                           rights from MSOs (and, if applicable, relevant
                           franchising authorities or other parties) for the
                           provision of telephony services to consumers over
                           such MSOs' cable systems, (ii) a "Hosted Model"
                           whereby NCT will provide MSOs with outsourced
                           end-to-end cable telephony service capabilities, or
                           (iii) any other model(s) as deemed appropriate by NCT
                           from time to time. The cable telephony services
                           offered by NCT are referred to herein as the "Cable
                           Telephony Solutions."


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Access Provisions:         Under the Agreement, Winstar will provide access to
                           local termination, interconnection, switching,
                           domestic long distance, international long distance,
                           advanced features services and such other services as
                           are set forth on Schedule A annexed hereto or as
                           shall be agreed to by the parties from time to time.
                           Winstar and/or IDT have and will maintain in effect
                           all approvals, certificates and licenses that they
                           are at present legally required to maintain ( as well
                           as comply with those requirements that may be
                           subsequently imposed and are not unduly burdensome)
                           to deliver the services required of them under the
                           Agreement. Winstar and IDT shall continue, for the
                           term of the Agreement to maintain their existing
                           capacity to deliver the services provided for in the
                           Agreement. All services shall be provided to NCT in
                           accordance with the standards of the Service Level
                           Agreement which is to be incorporated into the
                           Agreement. The parties shall coordinate the
                           management of their respective system facilities.
                           Winstar and its assignee(s), if any, will price the
                           services provided at their direct incremental costs
                           of providing the same (which shall not include
                           corporate allocations), plus 5%. Where appropriate,
                           the cost of providing a service or access to a given
                           system shall be determined on a pro rata basis by
                           reference to the capacity of the applicable system
                           and not by the actual use of that system. NCT shall
                           have the right to audit Winstar's costs
                           semi-annually, and all documentation supporting
                           invoiced amounts shall be preserved for at least 12
                           months from the date of the applicable invoice. To
                           the extent required by law, written materials
                           relating to the Cable Telephony Solutions offered by
                           NCT shall contain an appropriate reference to such
                           services being provided by Winstar.


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Consideration:             As additional consideration for the services being
                           provided under the Agreement, Winstar will receive
                           6,900,000 shares of the Class A common stock of
                           Net2Phone ("Shares) upon execution and delivery of
                           the Agreement, the guaranty and the security and
                           escrow agreement and other related documents by the
                           respective parties. The Shares will not be registered
                           and will be appropriately restricted by legend
                           against transfer without registration or other
                           compliance with federal and state securities laws.
                           The parties will enter into an appropriate security
                           and escrow agreement providing for the Shares to be
                           held in escrow by NCT as security for Winstar's and
                           IDT's performance hereunder and will be promptly
                           released from the escrow at the rate of 20% per year
                           on each of the first five anniversaries of the
                           execution of this agreement, subject to any claims
                           made against the Shares by NCT by reason of a
                           material default by Winstar or IDT under the
                           Agreement. NCT shall be entitled to direct, indirect,
                           incidental, consequential and exemplary damages,
                           including, without limitation, loss of revenue, loss
                           of profits, losses to customers, clients or goodwill
                           resulting from any material breach of the Agreement
                           by Winstar or IDT and shall have the right to recover
                           such damages by recourse to the Shares or by
                           proceeding directly against Winstar and IDT. In the
                           event that, notwithstanding the provisions of the
                           Agreement, Winstar shall reduce its capacity to
                           provide the services described herein by elimination
                           or modification of its infrastructure or otherwise
                           under circumstances that the reasonably anticipated
                           result of such actions would be to materially,
                           adversely affect NCT's ability to market its Cable
                           Telephony Solution and to obtain the services to be
                           provided by Winstar hereunder at substantially the
                           same ongoing costs, NCT shall have the right to
                           terminate the Agreement and all Shares not previously
                           released from escrow to Winstar shall revert to
                           Net2Phone. The security agreement shall provide for
                           arbitration of all disputes between the parties by a
                           mutually agreed upon arbitrator(s) and that, subject
                           to the arbitration provisions, NCT shall have all
                           rights of a secured party under the Uniform
                           Commercial Code as in effect in the State of New
                           Jersey from time to time.

Term and Termination:      The Agreement shall continue in effect indefinitely
                           unless terminated (i) upon mutual agreement of the
                           parties, (ii) upon the occurrence of certain
                           defaults, or (iii) by either party, on 6 months
                           notice, beginning 180 days prior to the fifth
                           anniversary of the execution and delivery of this
                           agreement.

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Restriction on
Competition:               Subject to the limitations of applicable law, each
                           party will agree that, during the term of the
                           Agreement, and subject to the terms of the Agreement,
                           neither it nor any of its affiliates will engage,
                           directly or indirectly, except through NCT, in (i)
                           providing cable telephony services in conjunction
                           with MSO's, (ii) the development, marketing or sale
                           of devices or software products that may be utilized
                           by consumers to obtain cable telephony services or
                           (iii) offering local telephony within the geographic
                           footprint of NCT's operations, provided that neither
                           IDT nor any of its affiliates will be restricted from
                           providing local telephony direct to consumers in any
                           area through fixed wireless or UNE-P telephony
                           offerings.

Representations,
Warranties
Covenants:                 Customary for a transaction of this type, including
                           representations and covenants relating to NCT's
                           obligations, if any, to obtain governmental
                           approvals, certifications or licenses and otherwise
                           comply with any and all applicable regulatory
                           obligations.

Indemnification:           Customary provisions for indemnification for losses
                           resulting from a breach of a party's representations,
                           warranties or covenants including with respect to
                           such services provided by Winstar as to which NCT was
                           legally required to but failed to obtain governmental
                           certifications.


                                      * * *



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                                   Schedule A


Description of services to be provided under  Agreement

Generally, and to the extent permissible by law, Winstar will provide all
services possible within its technical capacity in order to support the NCT
Business. This may include, but is not limited to, using NCT-provided ANI/CPN,
Winstar routing traffic for origination and termination by a third-party carrier
throughout the United States and International Territories as the Parties may
agree, 911 and E911, LNP, Pre-subscription, operator services, and
Interconnection with the PSTN. Winstar and NCT agree, within 90 days of the
Effective Date of this agreement, to more fully describe the processes by which
Winstar shall provide the Services to NCT.


      1.    Enhanced 911--This is an advanced form of 911 service in which the
            telephone number of the caller is transmitted to the Public Safety
            Answering Point ("PSAP") where it is cross-referenced with an
            address data base to determine the caller's location. Winstar will
            provide NCT with all the Services necessary for NCT to provision
            E911 to its MSO customers or Subscribers.

      2.    CALEA - The Communications Assistance for Law Enforcement Act of
            1994 ("CALEA") requires that telephone communications carriers have
            the ability to trace telephone calls and record their content in
            response to appropriate warrants and court orders. While Net2Phone
            has the ability to trace calls, it has not developed the capacity to
            record content. Cable Labs, the industry agency that establishes
            standards for packet cable compliance.. NCT is PacketCable
            compliant.

      3.    Operator Assisted Services. As a local exchange carrier, Winstar
            will provide MSO users of Net2Phone's cable telephony solution with
            such operator assisted services as operator assisted calling and
            directory assistance.


      4.    Telephone Numbers. Winstar will provide NCT with telephone numbers
            for assignment to its MSO customers or Subscribers, assuring that
            assigned numbers are placed in local exchange routing guides and
            providing the consumers with local number portability, that is the
            ability to allow a customer to transfer his/her existing phone
            number from one provider to another.

      5.    Leased Capacity. Winstar will provide NCT with the ability to lease
            capacity from both IDT and Winstar on a wholesale basis for purposes
            of carrying traffic on a dedicated basis on behalf of NCT's cable
            customers.

      6.    International Cable Operators. IDT's established connectivity
            arrangements throughout the world will enable NCT to offer its
            international cable customers pre-negotiated rates, interconnection
            agreements and facilities.

      7.    Domestic Cable Operators. Winstar's existing interconnect
            agreements, switches and other facilities provide access to the
            public switched telephone network as required.

      8.    Interconnect Arrangements. With the benefit of Winstar's established
            interconnect arrangements, NCT will be able to generate significant
            financial benefits for itself and its cable customers through
            reciprocal compensation arrangements.


                              II. EXCLUDED SERVICES

None.



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