Press RElease

AT&T and BellSouth Join to Create a Premier Global Communications Company

Deal Consolidates Ownership of Cingular Wireless; BellSouth and Cingular Brand Transition to Begin Soon

San Antonio, Texas, December 29, 2006

AT&T Inc. (NYSE: T) today closed its acquisition of BellSouth Corporation, creating a premier global communications company committed to driving convergence, continued innovation, and competition in the communications and entertainment market.

The transaction consolidates ownership and management of Cingular Wireless, the nation's leading provider of wireless voice and data services, and YELLOWPAGES.COM, a leading Internet Yellow Pages and local search site.

"AT&T will be an engine for innovation, competition, and growth for our customers at home and abroad," said AT&T Chairman and CEO Edward E. Whitacre Jr. "In the Southeast, we will build on BellSouth's excellent record of serving customers and communities. And we are ready to lead the way in a new era of integrated wireless services nationwide."

AT&T will immediately start to implement a carefully planned integration process to converge the AT&T, BellSouth, and Cingular wireless and wireline Internet Protocol (IP) networks, combine product portfolios and integrate customer care capabilities. The new company will be able to accelerate the introduction of innovative broadband services, such as IP-based services, while expanding the reach of broadband access in remote and rural locations in the traditional BellSouth region.

"AT&T, BellSouth, and Cingular have led in developing and deploying many of the communications services that customers depend on today, including broadband DSL and wireless technologies," said Whitacre. "Moving forward, AT&T will work to integrate these services for customers in the Southeast, across the country and around the world."

With the merger complete, AT&T enhances its U.S. leadership position in broadband, wireless services, voice services for consumers and businesses, and data services to Fortune 1000 companies.

In 2006, the AT&T Foundation provided more than $65 million in charitable contributions, ranking it among the top five largest corporate foundations in the country, in terms of annual giving. This year, Forbes magazine named the AT&T Foundation among the "25 Most Generous Corporate Foundations," ranking the company 11th on the magazine's list of top corporate donors.

In addition, nearly 350,000 AT&T employees and retirees serve their communities as members of AT&T Pioneers, the nation's largest company-sponsored volunteer organization.

Whitacre will continue to serve as chairman and CEO and as a member of the board of directors. Duane Ackerman will serve as chairman emeritus of BellSouth for the transition period following the merger.

Three members of the former BellSouth's board of directors have joined the AT&T board — Reuben V. Anderson, James H. Blanchard and James P. Kelly.

Reporting to Whitacre will be: Jim Cicconi, senior executive vice president - external and legislative affairs; Jim Ellis, senior executive vice president and general counsel; Karen Jennings, senior executive vice president - advertising and corporate communications; Jim Kahan, senior executive vice president - corporate development; Rick Lindner, senior executive vice president and chief financial officer; Forrest Miller, group president - strategic initiatives and human resources; Randall Stephenson, chief operating officer; and Ray Wilkins, group president.

Reporting to Chief Operating Officer Randall Stephenson will be: Dick Anderson, group president - global business services, replacing Forrest Miller; Stan Sigman, president & CEO - wireless; John Stankey, senior executive vice president and chief technology officer; and Ralph de la Vega, group president - regional wireline operations.

AT&T's current regional wireline presidents will report to de la Vega, along with Rod Odom, who has been named president and CEO, AT&T Southeast. Previously, Odom was president - network services for BellSouth Corporation.

Additional executive appointments will be announced in the near future.

AT&T's corporate headquarters will remain in San Antonio. The new AT&T Southeast (formerly BellSouth Corporation) and Cingular will continue to be based in Atlanta.

In the coming days, AT&T will launch extensive new advertising, which will begin the transition of the BellSouth brand name to AT&T. AT&T will re-brand Cingular through a co-branded transition, which is scheduled to start in 2007. Details regarding the Cingular branding will be announced at a later date. YELLOWPAGES.COM will not undergo a name or Web site address change.

Merger Synergies and Financials AT&T today affirmed the financial guidance it provided when the acquisition of BellSouth was announced in March 2006, including information on expected synergies. Specifically, AT&T expects that synergies from the combined operations will ramp quickly to reach an annual run rate exceeding $2 billion in 2008 and increasing to $3 billion in 2010. Merging AT&T, BellSouth, and Cingular Wireless is expected to yield a net present value of $18 billion in synergies.

Stockholders of the former BellSouth received 1.325 shares of AT&T common stock for each common share of BellSouth. Based on AT&T's closing stock price on Friday, Dec. 29, 2006, this exchange ratio equaled $47.37 per BellSouth common share.

In connection with the completion of the acquisition, BellSouth's common stock and debt securities will be immediately delisted from the New York Stock Exchange.

Approval Process The completion of the BellSouth acquisition comes after an extensive review process, which included approval by or filings with 36 states, the U.S. Department of Justice and the Federal Communications Commission (FCC), as well as with three foreign countries.

In order to receive bipartisan FCC approval, AT&T volunteered a number of commitments, including making broadband access increasingly affordable and available to consumers and supporting public safety.

AT&T has committed to making broadband services available through a combination of technologies to 100 percent of residential living units in its 22-state local- phone-service territory by the end of 2007. Additionally, AT&T will offer a stand-alone broadband service for $19.95, as well as other offers to encourage broadband adoption by those who do not currently subscribe.

AT&T plans to repatriate 3,000 jobs currently outsourced by BellSouth outside the United States, as well as to make its disaster-recovery capabilities available in order to facilitate the restoration of services in the former BellSouth region, in the event of a hurricane or other natural disaster.

"These commitments reflect our long history of providing consumers and businesses with the most advanced and affordable communications services," said Whitacre. "We can't wait to show people what the new AT&T can do."

Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's Web site at www.att.com/investor.relations.

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.

© 2006 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies.

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