http://www.att.com/gen/press-room?pi...rticleid=25791


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.