Press Release

AT&T First Foreign Carrier to be Granted New Telecom Licenses in India

Important milestone for AT&T's global operations allowing the company to enhance services and operations for multi-national customers in key market

San Antonio, Texas, October 9, 2006

New Delhi, India - AT&T Global Network Services India Private Limited (AT&T India), a joint venture which is majority-owned by AT&T Inc. (NYSE: T) (AT&T), has become the first foreign telecom operator in India to secure National Long Distance/International Long Distance (NLD/ILD) licenses to serve global and India-headquartered companies with advanced telecommunications services.

Today's announcement was made possible by the Indian Government's new policy of November 2005 on Foreign Direct Investment (FDI), which allows up to 74% foreign ownership for companies doing business in the country. AT&T owns 74% of AT&T India while the remaining 26% equity is held by Mahindra Telecommunications Investment Private Limited.

AT&T presently supports its global customer requirements in India through a cooperation agreement with a local licensed service provider, consistent with government regulations. Once AT&T India becomes operational later this year, AT&T India will directly serve the corporate enterprise market — including the multinational company, information technology-enabled service companies , software and business process outsourcing sectors, comprising of companies headquartered in India and globally.

Through these licenses, and related government approvals, AT&T India is planning to provide Virtual Private Network services to the corporate enterprise segment by the end of 2006. The company will also introduce several enhancements to its service portfolio with an array of advanced new security solutions, such as network and premises based firewalls, business continuity and disaster recovery services, and many more, which will be added in due course.

This announcement is part of the expansion of AT&T's global network, providing enhanced connectivity in the United States and around the world in order to meet the growing demands of multinational enterprises. Today, AT&T's MPLS-based IP network is available in 127 countries from more than 1,700 service nodes. AT&T also offers remote access in 149 countries through 45,000-plus access points.

After receiving the Foreign Investment Promotion Board clearance, AT&T India applied for NLD and ILD licenses on July 5th, 2006. The Department of Telecommunications granted Letters of Intent on September 18th, 2006 which were converted by AT&T India into two separate licenses — NLD and ILD — earlier today.

About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com.

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