Fitch Ratings Upgrades TeleCorp's Ratings.

Business Editors

CHICAGO--(BUSINESS WIRE)--Feb. 20, 2002

Fitch Ratings has upgraded the debt rating of TeleCorp Wireless and Tritel PCS (Tritel) following the closing of the acquisition by AT&T Wireless (AWE). TeleCorp PCS, Inc. (TeleCorp) is a holding company for the TeleCorp Wireless and Tritel subsidiaries. TeleCorp Wireless' senior secured credit facility has been upgraded to 'BBB' from 'B+', and the senior subordinated notes have been upgraded to 'BBB-' from 'B-'. Additionally, Tritel's senior credit facility has been upgraded to 'BBB' from 'B+', and the senior subordinated notes have been upgraded to 'BBB-' from 'B-'. The ratings have been removed from Rating Watch Positive and assigned a Stable Rating Outlook.

The ratings reflect AWE's financial flexibility and solid credit protection measures for its current rating category. Due to AWE's very strong liquidity position at the time of its spin-off from AT&T, AWE is fully funded for 2002 with a beginning cash balance of $3.3 billion and an unused $2.5 billion commercial paper program that is fully backstopped. Funding considerations include a potential requirement for the $2.3 billion Nextwave spectrum purchase through its designated entity partner Alaskan Native Wireless, the capital expenditures related to the GSM/GPRS deployment, the TeleCorp funding requirements after close and other committed investments. Estimated capital expenditure levels for 2002 remain high at $5 billion for AWE and $500 million for TeleCorp. Capital expenditures for 2001, elevated for the GSM/GPRS build-out at 37% of total revenues, were $5 billion, which met expectations. AWE was also slightly ahead of schedule with its nationwide deployment by having 45% of its markets built-out at the end of 2001 versus the 40% goal.

TeleCorp shareholders approved the merger with AWE two weeks ago, and the transaction closed on February 15. AWE issued approximately 146 million shares of AWE common stock. In conjunction with the closing of the TeleCorp transaction, NTT DoCoMo purchased about 26 million shares of AWE common stock for $375 million to maintain its 16% equity interest in the company. AWE is expected to repay the approximately $800 million of bank debt at TeleCorp. The remaining public TeleCorp debt is held at the operating subsidiaries. While the TeleCorp debt is non-recourse to AWE and TeleCorp is funded as a stand-alone entity with support from the parent, Fitch believes significant implicit support exists for the debt due to the strategic value of the acquisition to AWE. From an operational perspective, AWE benefits from margin enhancements by bringing roaming traffic on network, by accelerating deployment of a seamless GSM/GPRS footprint and by deploying a single brand and pricing plan throughout TeleCorp's markets.