AT&T Wireless Outlines Actions It Will Take to Meet 2003 Goals.

Business Editors/High-Tech Writers

NEW YORK--(BUSINESS WIRE)--Jan. 28, 2003

AT&T Wireless (NYSE:AWE):

-- Previews GoPhone (SM) offer targeted to new sets of customers;

-- Announces tower cost-sharing arrangement with Sprint;

-- Agreement with Bechtel to lower costs of network expansion;

-- Distribution agreement with Dell;

-- Strategic relationship with IBM to create integrated wireless solutions for mobile pros;

-- Enters Wi-Fi business.

At its annual conference here with financial analysts, AT&T Wireless (NYSE:AWE) today announced its fourth-quarter 2002 earnings, provided its 2003 outlook, and outlined the actions it will take to meet its goals for this year and beyond.

These actions include, among many others: an upcoming offer called GoPhone targeted to new sets of customers; a tower cost-sharing arrangement with Sprint to help lower capital expenditures; an agreement with Bechtel to lower costs of network expansion; a distribution agreement with Dell; and a strategic relationship with IBM to create integrated wireless solutions for mobile professionals.

The company also said it is entering the Wi-Fi business with AT&T Wireless GoPort (SM), a high-speed wireless data service available in major airports and hotels.

"We enter 2003 with a three-year record of solid, dependable financial results and fresh from deploying our next-generation network throughout our core footprint," said John D. Zeglis, chairman and CEO of AT&T Wireless. "We are using that network as the stage on which to premier the industry's richest array of wireless data offers for consumers and businesses.

"AT&T Wireless achieved its results in a challenging economic environment, where it seems all but forgotten that wireless is still an industry with significant new opportunities for growth. Just over 50 percent of America uses wireless, but the other 50 percent remains to be converted -- no small opportunity. What's more, the growth of wireless usage continues unabated, making up about 15 percent of all calling, with 85 percent of the opportunity still ahead of us.

"To reach our goals, we will introduce new ways of marketing and distributing our products to current and prospective customers, seize opportunities in wireless data, pursue and deploy global-standard-technology, and continue to operate a high-performing, low-cost network.

"Aggressively pursuing revenue-growth opportunities, especially breaking into the next 50 percent of the market, will help get us to an important destination in our journey, namely, positive free cash flow," Zeglis said.

"We will focus more intensely than ever on operational excellence in order to reach positive free cash flow," said Michael Keith, president of the company's mobility operations. "This means, among other things, lowering our costs of acquiring and retaining customers, using our capital dollars efficiently across our TDMA and GSM/GPRS networks, and investing in our information technology systems so they become a strategic asset that differentiates our services and reduces our cost structure."

New ways of serving current and prospective customers

"New ways of serving current and prospective customers are required in an industry morphing from a growth-at-all costs, land-grab mentality to a balanced blend of growth and profitability. We fully intend to get our fair share of profitable industry growth," Keith said.

AT&T Wireless said it will continue majoring in high-value customers, who generate the most revenue and cash flow. Brand is important to attracting and retaining these customers, and AT&T Wireless is at the top of the industry list in such key brand attributes as "leader in industry," "trusted provider," and "quality provider," the company said.

High-value customers want easy-to-understand service plans that are responsive to their needs and offer one-of-a-kind rewards, including benefits from partnerships with other companies, the company said. Building on strong take-rates by high-end customers of the AT&T Wireless Charter Offer introduced last year, the company will continue to provide plans that combine simplicity and value.

According to AT&T Wireless, these customers also want a broad array of the latest wireless devices from which to choose. That is why the company has an aggressive equipment roll-out schedule so that the coolest new handsets are available faster and sooner. Many devices were on display at the company's conference today.

"In addition to serving high-value customers, we will also introduce innovative ways of reaching people who, for whatever reason, have not taken the wireless plunge," said Michael Sievert, the company's chief marketing officer.

For example, in the coming months, the company will make available the AT&T Wireless GoPhone (SM) offer. "This new service will attract those customers for whom the current types of wireless offers - postpaid and prepaid - are not appealing. Because of its low customer service and distribution costs and efficient payment-collection methods, GoPhone also will also minimize our financial risk," Sievert said.

GoPhone will not require long-term contracts or deposits, and will be more attractively priced and easier to use than current prepaid plans. Customers simply buy and activate their new next-generation GoPhone phone - and go. A set monthly fee is automatically charged to their checking account or credit card, the company noted.

"The E-ZPass (SM) system used in the Northeast to collect tolls has changed the experience of using bridges, tunnels, and turnpikes. The AT&T Wireless GoPhone offer will change the way people think about and use wireless services," Sievert said.

Seizing opportunities in wireless data

"We have built an unparalleled array of wireless data offers for consumers and businesses, and we intend to aggressively extend our leadership in 2003 and beyond," said Andre Dahan, president of mobile multimedia services at AT&T Wireless.

The company has the largest share in the United States of the text messaging or SMS (short message service) market, the fastest growing part of the wireless data industry. "We will introduce fun and innovative programs this year to encourage people to use wireless text messaging," Dahan said.

For example, viewers of Fox Broadcasting's popular "American Idol" program will be able to vote for their favorite performer by sending a short message from their wireless phone - a first in U.S. television history. In addition, AT&T Wireless will roll out capabilities enabling people to send and receive messages not only with words, but with pictures and sounds as well.

The company will continue to broaden and deepen the rich content and capabilities of its mMode consumer data offers, which currently give people access to more than 260 sites and applications from top brands, to a library of more than 150 games, and to 1,000 ringtones and graphics.

Thousands of leading data developers are involved in creating content for mMode and other wireless data applications, the company noted.

"In 2003, we also intend to build on our leadership in wireless data for businesses by broadening our portfolio of solutions -- including three we are announcing today -- and the means to design, integrate and distribute them," Dahan said. The announcements are:

-- A strategic distribution relationship with Dell to provide

mobile professionals with wireless connectivity from their

notebook computers using AT&T Wireless' next-generation

network.

-- An agreement with IBM to use that company's industry-leading

email and other messaging products to create integrated

wireless solutions for mobile professionals.

-- The company's entry into the Wi-Fi business with the

introduction of AT&T Wireless GoPort, a high-speed wireless

data service that lets mobile professionals stay connected

when they are away from the office. The service is already

available at the Denver International Airport. Beginning in

mid-February, AT&T Wireless GoPort customers can access Wi-Fi

systems at airports in Austin, Dallas-Fort Worth, Denver, San

Jose, and Seattle, and from more than 475 major hotels across

the United States.

Global-standard technology and high-performing, low-cost network

"Our ability to serve customers effectively and deliver innovative services is built on two foundations - the global-standard technology we have chosen and our commitment to operate a high-performing, low-cost network," said Greg Slemons, executive vice president of the company's wireless network services division.

AT&T Wireless has deployed GSM/GPRS as its next-generation technology. In 2002, according to the GSM Association, nearly 800 million people around the world used phones based on this standard. That number is expected to reach one billion by the end of 2003, this group predicts.

Last year the company rolled out its GSM/GPRS network ahead of schedule and on budget. AT&T Wireless' total footprint will cover approximately 221 million PoPs by the end of 2003. In addition, a software enhancement called EDGE will be deployed this year, which more than triples GPRS data speeds and provides two-and-one-half times more data capacity.

"We are also in the early stages of implementing technology even more powerful than EDGE. By the end of 2004, AT&T Wireless will have the first deployment in four cities - Dallas, San Francisco, San Diego, and Seattle -- of UMTS wideband wireless data capability in the Western Hemisphere," Slemons said. A trial is already under way in Dallas, the company noted.

"Wireless technology is only as robust as the network on which it operates, and we are focused on operating a high-performing, low-cost network," Slemons said. "We have steadily driven network unit costs down while bringing performance and quality up - an unbeatable one-two punch," he said. The company's mid-term goal for network unit cost is two cents per minute.

In an effort to lower the capital costs associated with its network, AT&T Wireless announced a joint agreement with Sprint through which the companies will cooperate in the construction of new wireless towers and an agreement with Bechtel to lower the costs of network expansion.

About AT&T Wireless

AT&T Wireless (NYSE:AWE) is the second-largest wireless carrier, based on revenues, in the United States. With 20.859 million subscribers, and full-year 2002 revenues exceeding $15.6 billion, AT&T Wireless will continue delivering advanced high-quality mobile wireless communications services, voice or data, to businesses and consumers, in the U.S. and internationally. For more information, please visit us at www.attwireless.com.

This press release contains "forward-looking statements" which are based on management's beliefs as well as on a number of assumptions concerning future events made by management with information that is currently available to management. Forward-looking statements include, without limitation, management's expectations regarding: our future financial and operating performance and financial condition, including the company's outlook for the fiscal year 2003 and subsequent periods; subscriber growth; industry conditions; the strength of our balance sheet; our liquidity and needs for additional financing; and our ability to generate operating free cash flow.

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 Wireless' control, that could cause actual results to differ materially from such statements. Without limitation these factors include: the risks associated with the implementation of our technology migration strategy, our ability to continue to reduce costs, the potential competitive impacts of industry consolidation or alternative technologies, potential impacts on revenue and ARPU from competitive pricing and slowing penetration in the wireless industry, the effects of vigorous competition in the markets in which we operate, the risk of decreased consumer spending due to softening economic conditions, the outbreak of war or acts of terrorism, and consumer response to new service offerings.

For a more detailed description of the factors that could cause such a difference, please see AT&T Wireless' filings with the Securities and Exchange Commission, including the information under the heading "Additional Factors That May Affect Our Business, Future Operating Results and Financial Condition" and "Forward Looking Statements" in its quarterly report of Form 10-Q filed on November 13, 2002.