The Transformation of Telecommunications

The New AT&T Family of Companies is Positioned to Lead the Industry Into a New Era of Integrated Communications and Entertainment

Over the past 20 years, the way we communicate has dramatically changed. The Internet has revolutionized how we gather information, shop, listen to music and watch video. Wireless communications have grown to become indispensable for most Americans. We have office phones, cell phones, home phones, HDTVs, PDAs, BlackBerries, laptops, desktops and countless messages spread out among them all.

There's no question that these services have improved how we work, play and live. At the same time, the lines between work and home have blurred ... no longer are communications limited to the office or the living room.

Today's communications services make us more efficient, but they have created new challenges at the same time. Managing information is more challenging than ever, and constant access to messages and services is critical, whether we're at work, at home or on the road.

The new AT&T family of companies has led in the development and deployment of many of the communications services that we depend on today, including broadband DSL and wireless technologies. Today, the new AT&T companies are focused on making these services work together and work better for users. In fact, the creation of the new AT&T is perhaps the most important indication yet that the long-promised notion of convergence will become reality for customers of all kinds.

It's no small task. As separate services evolved over the years, proprietary technology and networks evolved with each of them. Today, Internet Protocol enables us to converge these technologies to create integrated networks and services.

What that will mean for users is anytime, anywhere access to applications — on any device. With integrated applications over IP, users will tap into multiple services over any number of devices, and applications will adapt to the device that a customer happens to be using. Services will switch from wired to wireless connections as users move from location to location. The supporting network will be aware of the device a customer is using, enabling customization of applications and content based on how a customer is accessing them.

Delivering this vision requires a dramatic transformation of the communications industry. The new AT&T companies are focused on making this transformation a reality by evolving its global backbone, local access and wireless networks to deliver and share information seamlessly via IP.

In this transforming industry, no single company better illustrates the promise and potential of convergence than the new AT&T. The combined company will be among the best-prepared in the industry to lead this communications revolution in the workplace and home. The new AT&T family of companies has global IP-based network capabilities, assets and resources that are widely regarded as unsurpassed in the marketplace, creating the potential to unleash new IP innovations that neither company could have accomplished independently.

When these assets are fully integrated, the new AT&T will be among the best-positioned to deliver a full range of services to both consumers and business customers of all sizes. That means more innovation and better services for customers — and greater benefits for investors — as the new AT&T competes against cable, wireless, VoIP and enterprise services providers, both domestically and globally.

The benefits of this transformation are already evident with the new AT&T services such as Unified Communications, which provides a single inbox for wireless and wireline voice as well as e-mail. In 2006, additional services will become available, such as:

• A wireless phone with capabilities to automatically send photos to a Web portal.
  
  
• Dual-mode phones that will enable seamless hand-offs between wireline and wireless networks.
  
  
• Phones that support instant messaging in addition to voice communications.
  
  

Additionally, more powerful integrated services and devices will be introduced in the future, as the combined company continues to build on this anytime, anywhere communications strategy.

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