AT&T Wireless Services Second Quarter Revenue Increases 36.5 Percent; Net Mobility Subscriber Additions of 668,000; Mobility EBITDA Rises 56.1 Percent.

Business Editors, Technology Writers

REDMOND, Wash.--(BUSINESS WIRE)--July 24, 2001

AT&T Wireless (NYSE:AWE) said today that total revenue for AT&T Wireless Services increased 36.5 percent to $3.380 billion in the second quarter compared to the year-ago quarter.

The revenue growth also fueled a 50.4 percent increase in AT&T Wireless Services operating income plus depreciation and amortization (EBITDA).

"AT&T Wireless has once again delivered strong quarterly growth," said John D. Zeglis, chairman and CEO. "For our mobility business, services revenue was up more than 39 percent, our net subscriber additions grew nearly 26 percent and we increased EBITDA by 56 percent."

Services revenue for the mobility business increased $883 million to total $3.123 billion in the second quarter, which represented 39.4 percent growth compared with the year-ago period. Services revenue for the mobility business increased 20.3 percent compared to the year-ago quarter when adjusted to exclude the impact of the June 2000 acquisition of properties in the San Francisco Bay area, as well as the impact of the acquisition of the Los Angeles market in December 2000. ARPU (average revenue per user) was $63.80, a 2.6 percent increase from the first quarter of 2001 and a decrease of 10.8 percent compared to the year-ago quarter. The sequential improvement in ARPU resulted from a higher level of postpaid customers and the seasonal impact related to increased usage.

Consolidated subscriber net additions for the mobility business totaled 668,000 in the second quarter, an increase of 25.6 percent from the second quarter of 2000. Net subscriber additions in the second quarter, including partnerships and affiliates, totaled 860,000. Total consolidated subscribers were 16.4 million at the end of the second quarter, representing a 40.3 percent increase from the prior year, including subscribers associated with acquisitions that occurred subsequent to the second quarter of 2000. Total subscribers, including partnerships and affiliates, were 18.8 million at the end of the second quarter.

The AT&T Wireless mobility business had second quarter EBITDA of $858 million, an increase of 56.1 percent from the year-ago period. The increase included the results of acquisitions that occurred during 2000, as well as a continued focus on cost reductions. Given the strong subscriber growth, the increase was partially offset by higher customer acquisition, network and customer care costs. EBITDA margin was 27.5 percent of services revenue in the second quarter up from 24.5 percent in the comparable period last year. The margin improvement was driven primarily by the growth in services revenue and the reduction of incollect costs.

"Last week, AT&T Wireless began offering Seattle businesses the next generation of wireless services, making us the first wireless carrier in the United States to introduce advanced wireless data services," said Mohan Gyani, president and CEO for AT&T Wireless' mobility business. "Soon, millions of our customers will have an exciting first taste of new mobile multimedia services."

"Like our split-off from AT&T just two weeks ago, we're hitting our markers and our commitment to succeed couldn't be stronger," Zeglis added. "Ultimately, we envision a world where our customers are liberated and their lives enriched by untethered access to all the world's people and all the world's information, no matter where they are on earth."

AT&T Wireless will launch GSM/GPRS (2.5 G network) service in markets representing approximately 40 percent of the population it serves this year and markets that cover 100 percent by the end of 2002. The company, with its partners and affiliates, has enough spectrum to roll out GSM/GPRS and EDGE in virtually all the top 100 markets, and to launch full 3G(UMTS) in more than 70 of the top 100 markets.

The company also said it expected third quarter net subscriber additions to range between 700,000 -- 750,000. A higher level of net subscriber additions is expected for the fourth quarter. For the year, AT&T Wireless continues to target subscriber growth to be around 20 percent.

A detailed explanation of AT&T Wireless' second quarter financial results can be found at www.att.com/wirelessir.

About AT&T Wireless

AT&T Wireless (NYSE:AWE) is the largest independently-traded wireless carrier in the United States, following our split-off from AT&T on July 9, 2001. We operate one of the largest digital wireless networks in North America. With more than 16.4 million subscribers, and full-year 2000 revenues exceeding $10.4 billion, AT&T Wireless is committed to being among the first to deliver the next generation of wireless products and services. Today, we offer customers high-quality wireless communications services, whether mobile or fixed, voice or data, to businesses or consumers, in the U.S. and internationally. AT&T Wireless Customer Advantage is our commitment to ensure that customers have the right equipment, the right calling plan, and the right customer services options -- today and tomorrow. For more information, please visit us at www.attwireless.com.

The foregoing may contain "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 Wireless' 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 Wireless' filings with the Securities and Exchange Commission.

AT&T Wireless disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise

NOTE TO FINANCIAL MEDIA: AT&T Wireless executives will discuss the company's performance in two-way conference calls for financial analysts at 11:00 a.m. -- noon EDT. Reporters are invited to listen to the call. To access the call, U.S. callers should dial 888/423-3275. Callers outside the U.S. should dial 612/332-1020.

The 2Q Earnings Commentary will be available at http://www.att.com/wirelessir at approximately 8:00 a.m. EDT on July 24. A replay of the conference call will be available at 7:00 p.m. EDT on Tuesday, July 24 until midnight on July 26. To access the replay, please visit http://www.att.com/wirelessir, or U.S. callers should dial 800/475-6701, access code 591919. Callers outside the U.S. should dial 320/365-3844, access code 591919.

Note: The Earnings Commentary will be available at http://www.att.com/wirelessir at about 8:00 a.m. EDT on July 24.