AT&T to Offer Next-Generation iPhone on Its High-Performance 3G Network

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San Antonio, Texas, June 9, 2008--AT&T Inc. (NYSE:T) today announced it will be the exclusive U.S.
provider of the new iPhone 3G, details of which were outlined earlier
today at Apple's Worldwide Developer's Conference in San Francisco.

Under the terms of a new agreement with Apple, AT&T remains the exclusive U.S. carrier of the
iPhone 3G, which will be available beginning July 11 at a starting
price of $199 with a two-year contract. The iPhone 3G boasts several
significant enhancements, including:

• 3G broadband wireless connectivity, which gives customers a
  home broadband-like speed experience when surfing the Internet, sharing
  files and using media-rich Web applications.
• Business-class
  capabilities, including e-mail, viewed on a large, touch-screen device
  and designed to meet the needs of companies of all sizes.
• The
  ability for developers, including AT&T, to create customized
  consumer and business applications using the Apple software developer's
  kit (SDK).

Customers can get more information on the iPhone 3G at www.att.com/iphone.

AT&T expects that the iPhone 3G's attractive pricing and rich
set of features including business e-mail and other applications,
combined with the broadband speeds of AT&T's 3G network, will spur
significant subscriber and revenue growth — particularly in wireless
data — and strengthen AT&T's wireless leadership and long-term
growth profile.

"The iPhone 3G will take mobile communications and computing to a
whole new level by combining a terrific user interface with a great
experience accessing the Internet and subscribers' favorite
applications on our 3G wireless network at unsurpassed speeds," said
Ralph de la Vega, president and chief executive officer of AT&T
Mobility. "Combine our high-performance 3G broadband wireless network,
the new iPhone's business-class capabilities and a starting price of
$199, and I expect that we will continue to increase revenue per user
and attract customers who spend the most on wireless. The device is
built, and priced, to sell."

AT&T will sell iPhone 3G in more than 2,200 company-owned retail
stores and kiosks, as well as through its direct business sales teams.

New Agreement With Apple Reflects Significant Growth Opportunity
The new agreement between Apple and AT&T eliminates the
revenue-sharing model under which AT&T shared a portion of monthly
service revenue with Apple. Under the revised agreement, which is
consistent with traditional equipment manufacturer-carrier
arrangements, there is no revenue sharing and both
iPhone
3G models will be offered at attractive prices to broaden the market
potential and accelerate subscriber volumes. The phones will be offered
with a two-year contract and attractive data plans that are similar to
those offered for other smartphones and PDAs. AT&T anticipates that
these offers will drive increased sales volumes and revenues among
high-quality, data-centric customers. Currently, less than 20 percent
of AT&T's postpaid subscribers have integrated devices capable of
voice, Web and data applications. Based on the company's experience,
average monthly revenues per iPhone subscriber are nearly double the
average of the company's overall subscriber base.

• With a two-year contract, the price of an 8GB iPhone 3G will be $199; the 16GB model will be priced at $299.
• Unlimited
  iPhone 3G data plans for consumers will be available for $30 a month,
  in addition to voice plans starting at $39.99 a month.
• Unlimited 3G data plans for business users will be available for $45 a month, in addition to a voice plan.

In the near term, AT&T anticipates that the new agreement will
likely result in some pressure on margins and earnings, reflecting the
costs of subsidized device pricing, which, in turn, is expected to
drive increased subscriber volumes. The company anticipates potential
dilution to earnings per share (EPS) from this initiative in the $0.10
to $0.12 range this year and next, with a 2008 adjusted consolidated
operating income margin of approximately 24 percent and a full-year
2008 wireless OIBDA margin in the 39-40 percent range. As recurring
revenue streams build without any further revenue sharing required,
AT&T expects the initiative to turn accretive in 2010.

AT&T's 3G Wireless Network
The iPhone 3G harnesses the power of AT&T's broad and powerful 3G
mobile broadband network, which offers 3G mobile phones download speeds
of up to 1.4 Mbps. AT&T's 3G network is currently available in 280
leading U.S. metropolitan areas; by year-end, the company plans to
offer 3G service in nearly 350 metro areas. Following the recent
turndown of its TDMA network, the company is further enhancing its 3G
network, with improved coverage quality made available through
reallocated 850 MHz spectrum.

AT&T's 3G network is the best positioned among American carriers
to grow in line with customer demand, evolving to next-generation
speeds incrementally during the next few years. Between 2005 and the
end of 2008, AT&T will have invested more than $20 billion in
wireless network improvements and upgrades.

AT&T has the best global coverage of any provider, with
voice-roaming available in more than 200 countries and data-roaming in
more than 145 countries, including more 3G roaming than any other
carrier.

In addition, the new iPhone 3G will operate in Wi-Fi mode through
wireless modems in homes and offices, as well as public hot spots.

Marketing the iPhone to Businesses
iPhone 3G
includes new business capabilities, including access to corporate
e-mail and intranets, as well as the ability to certify mobile business
applications to suit the needs of an array of industries, ranging from
health care and real estate to higher education and financial services.
Starting July 11, AT&T will begin marketing to its business
customers, which includes all of the Fortune 1000. To prepare for the
rollout, AT&T will be conducting extensive training among its
thousands of enterprise and small business sales force and
customer-support employees. AT&T is the world's leading provider of
corporate wireless e-mail solutions.

"We're anticipating significant demand from companies of all sizes
based on the feedback we've received from the many corporate customers
who have already purchased the first-generation iPhone, as well as from
companies waiting for the new iPhone's business applications," said Ron
Spears, group president, AT&T Global Business Services. "Businesses
will benefit from all of the iPhone's new features, as well as the
ability to maximize productivity by using the combination of 3G
broadband connectivity and customized applications."

Through its work over the years with the developer community,
AT&T has developed a robust catalog of hundreds of enterprise
applications (www.att.com/choice).
AT&T will work with Apple, using the SDK process, to enable many of
these applications, which today operate on other AT&T-powered
wireless devices, to also work on the iPhone. The growth of mobile
applications represents a huge opportunity for companies to improve
productivity through reduced overhead expenses, access to real-time
information and higher levels of speed and efficiency.

Unleashing Innovative Applications With the SDK
AT&T is working closely with Apple to roll out several new and
innovative applications that take advantage of the iPhone's advanced
capabilities. For example, AT&T is finalizing YELLOWPAGES.COM
mobile for the iPhone, an innovative location-based application that
combines local search with social networking capabilities, giving users
the ability to search for information, share reviews and plan
activities with friends, neighbors and co-workers. In addition, the
company will work to certify many of its existing mobile applications
for businesses, created in conjunction with third-party developers, for
use on the iPhone.