AT&T Raises Basic Residential Calling Rates While Offering Consumers Unprecedented Choice, Flexibility, and Savings Opportunities.

Business & Telecommunications Editors

BASKING RIDGE, N.J.--(BUSINESS WIRE)--June 1, 2001

New rates remain, on average, below those of MCI and Sprint

Company urges residential customers to consider their calling

habits and pick the plan that best meets their needs

AT&T said today it will raise its basic residential calling rates while continuing to offer plans that give consumers unprecedented choice, flexibility, and savings opportunities.

Among the choices available to consumers are a basic-rate offering of 10 cents per minute on either Saturday or Sunday and a 24/7 basic rate of 17.5 cents a minute, with no monthly fees or minimum charges.

The new rates, which become effective July 1, remain lower, on average, than those of MCI and Sprint.

AT&T's new basic rates on direct-dialed state-to-state calls made from home are: 30 cents per minute (up from 29.5) on weekdays from 7 a.m. to 7 p.m; 25 cents per minute (up from 22.5) on weekdays from 7 p.m. to 7 a.m.; and 16 cents per minute (up from 14.5) on weekends.

As a member of CALLS (Coalition for Affordable Local and Long Distance Service), an industry coalition created to effect access reform, AT&T last year said it would not change its basic residential rates for one year. The company has kept this commitment. In the last 12 months, MCI and Sprint have raised their basic rates several times.

AT&T's new basic rates compare as follows to those of MCI and Sprint:

                  Weekdays   Weeknights    Saturday      Sunday
New AT&T Basic    30 cents    25 cents     16 cents      16 cents
MCI Basic         30 cents    25 cents     25 cents      10 cents
Sprint Basic 31-38 cents(a) 20-27cents(a) 11-17 cents(a) 11-17 cents(a)

"In taking this action, we wanted to be fair to our customers. That is why some of the increases are very slight. More important, our new basic rates continue to be the lowest, on average, of the major long distance carriers," said Robert M. Aquilina, senior vice president of long distance for AT&T Consumer.

"As always, we urge basic-rate consumers - our own and those with other carriers -- to examine their calling habits and pick the plan that best meets their needs. The choice, flexibility, and savings opportunities AT&T offers to basic-plan customers are unprecedented and unmatched in the long distance industry. We have an offer that works for you and your family."

In addition, AT&T customers can receive significant benefits from AT&T Online Billing, even if they make just a few calls each month. Customers who sign up for this service get $1 off their phone bill every month for a year. They can easily review and sort their bills online, request credit for a wrong number, identify calls by name using a reverse-number lookup capability, and authorize payments from either a credit card or checking account. "All our customers, including those on our basic rate plans, can enjoy the money-saving convenience of online billing," Aquilina said.

AT&T has other basic rate plans that offer customers significant savings opportunities during the time they prefer to call. They are:

-- 10-Cents Sunday Basic, which offers a Sunday rate of 10 cents a minute for
state-to-state calls from home, with no fees or monthly minimum charges. with
savings up to 40 percent off Sprint's basic Sunday rate, this plan is ideal for
people who make most of their calls on the most popular day for consumer
calling. Sunday Basic rates at other times are: 30 cents per minute
(Monday-Friday, 7 a.m. to 7 p.m.); 25 cents per minute (Monday-Friday, 7 p.m.
to 7 a.m.); and 20 cents per minute (Saturday).

-- 10-Cents Saturday Basic, which offers a Saturday rate of 10 cents per minute
for state-to-state calls made from home, with no fees or monthly minimum
charges. Priced 60 percent below MCI's Saturday basic rate, this plan is ideal
for people who make most of their calls on the second most popular day for
consumer calling. Saturday Basic rates at other times are: 30 cents per minute
(Monday-Friday, 7 a.m. to 7 p.m.); 25 cents per minute (Monday-Friday, 7 p.m.
to 7 a.m.); and 20 cents per minute (Sunday).

-- AT&T One Rate (R) Basic, which offers a low rate of just 17.5 cents a
minute, 24 hours a day, seven days a week, with no fees or monthly minimum
charges. One Rate Basic is ideal for people who want a single rate that is good
all the time. Someone who makes most of their calls from 7 a.m. to 7 p.m. on
weekdays, for example, will save more than 40 percent off AT&T's normal weekday
rate.

More frequent callers can choose from AT&T's family of optional calling plans, which offer low per-minute rates and the convenience and savings of on-line billing:

-- AT&T 5 Cents eWeekends Plan offers a rate of 5 cents per

minute on direct-dialed state-to-state calls made from home on

weekends and 9 cents per minute during the rest of the week.

This on-line plan has no monthly fee, though a $5.00 monthly

minimum usage requirement applies.

-- AT&T One Rate (R) 7 Cents Plan offers a 24/7 rate of 7 cents

per minute on direct dialed state-to-state long distance calls

from home for a monthly plan fee of $3.95. In addition, this

on-line offer gives consumers the added benefit of $1 off

their bill every month for 12 months.

-- AT&T One Rate 5 Cents Weekends offers a rate of 5 cents per

minute on weekends and 7 cents per minute during the rest of

the week for a monthly plan fee of $4.95. In addition, this

on-line offer gives consumers the added benefit of $1 off

their bill every month for 12 months.

Consumers who want more information about AT&T's residential calling plans may go to www.att.com and click on "Consumer." There they will find detail on all the company's consumer services. Consumers can also call the number listed on their bill.

(a) Sprint's rates vary by distance.

AT&T (www.att.com) is among the world's premier voice, video and data communications companies, serving consumers, businesses and government. AT&T has annual revenues of nearly $66 billion and 162,000 employees, and provides services to customers worldwide. Backed by the research and development capabilities of AT&T Labs, the company runs the world's largest, most sophisticated communications network, is the largest cable operator in the U.S., and has one of the largest digital wireless networks in North America. The company is a leading supplier of data and Internet services for businesses and offers outsourcing, consulting and networking-integration to large businesses. Concert, the AT&T/BT Global Venture, serves the communications needs of multinational companies and international carriers worldwide.

In October 2000, AT&T announced a restructuring plan to create a family of four businesses, each operating under the "AT&T" brand, committed to uniform standards of quality. Under the plan, which is expected to be completed in 2002, each of these four businesses will become publicly held, trading as either a common stock or tracking stock.

The foregoing are "forward-looking statements" which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside AT&T's control, that could cause actual results to differ materially from such statements. For a more detailed description of the factors that could cause such a difference, please see AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of AT&T.