Virgin Megastores Selects AT&T For Network Services

AT&T Network Delivers Enhanced Shopping Experience to Customers, Voice and Data to Employees

Los Angeles, California, December 19, 2006

AT&T Inc. (NYSE: T) announced today a new relationship in which AT&T will provide Virgin Megastores a cost-effective network solution to support the company's new Internet Protocol (IP) network. AT&T will provide Virgin with Virtual Private Network (VPN) services utilizing Multiprotocol Label Switching (MPLS) technology. AT&T will also offer support services to fully manage and monitor the entire network connecting Virgin's United States store locations. Virgin Megastores has 13 locations in the United States, where it sells music, electronics, and fashion products.

In addition to VPN, AT&T will provide hosting and local and long distance voice service to all of Virgin's locations. With this suite of AT&T services, Virgin will be able to reduce costs through on-net calls and least-cost routing. AT&T's VPN network will enable Virgin to transfer phone calls, provide music and Internet access to all branches and transmit point-of-sale data. An additional exciting feature of the new network enables Virgin to stream content stored in one of AT&T's Internet data centers to its retail locations, enabling customers to listen to music before making a purchase.

"Virgin recently overhauled its entire corporate infrastructure, which enabled us to streamline our network and provide an elevated consumer experience at a savings of nearly $700,000 annually," said Robert Fort, IT director of Virgin Entertainment Group, North America. "AT&T's VPN network with MPLS technology is completely installed in all of our locations, allowing us to utilize the network to its fullest potential. We are now beginning to realize the financial and business advantages that Virgin hoped for at the beginning of this project."

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About Virgin
Virgin Entertainment Group is the world's premiere music and entertainment retailer, providing customers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and Virgin Megastore Online at www.virginmegamagazine.com are integral parts of a strategy to provide entertainment customers with what they want, how they want it, and when they want it. Virginmegamagazine.com features a vast selection of music, video, DVDs, software, video games and books now available for online purchase. For more information, or to check out the location of the nearest Virgin retail, go to www.virginmegamagazine.com.

About AT&T
AT&T Inc. is one of the world's largest telecommunications holding companies and is the largest in the United States. Operating globally under the AT&T brand, AT&T companies are recognized as the leading worldwide providers of IP-based communications services to business and as leading U.S. providers of high speed DSL Internet, local and long distance voice, and directory publishing and advertising services. AT&T Inc. holds a 60 percent ownership interest in Cingular Wireless, which is the No. 1 U.S. wireless services provider with 58.7 million wireless customers. Additional information about AT&T Inc. and AT&T products and services is available at http://www.att.com.

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