AT&T Announces Agreement to Acquire Interwise - Leading IP Voice/Video/Web Conferencing Provider

$121 Million Acquisition Will Bolster AT&T's Position in Conferencing and Collaboration

San Antonio, Texas, October 1, 2007

AT&T Inc. (NYSE: T) announced today that it has agreed, through one of its subsidiaries, to acquire privately held Interwise®, a leading global provider of voice, Web and video conferencing services to businesses. AT&T will pay approximately $121 million in cash for the company.

The transaction, which is expected to close in the fourth quarter, strategically aligns Interwise's innovative IP-based conferencing and collaboration solution with AT&T's enterprise networking, communications and collaboration services, global MPLS-based IP network and its industry-leading conferencing portfolio of services.

Following the acquisition, the company will operate as a business unit within AT&T Global Business Services, which serves the largest enterprises around the world and is led by Group President Ronald E. Spears. AT&T expects to retain Interwise's management team and its domestic and international operations, including its R&D center in Israel.

"The addition of Interwise's technology and expertise in conferencing to AT&T's global reach, networking and conferencing capabilities will broaden and enhance the range of solutions for our enterprise customers who are making the transition to IP networking," said Spears.

"Our enhanced capabilities will enable businesses around the globe to use conferencing as more than just a substitute for face-to-face meetings. The IP-collaboration solutions offered by Interwise will help customers increase the impact of their efforts by allowing employees to work on joint projects simultaneously with colleagues and partners, share information regardless of their location or device and make better business decisions," Spears said.

With the acquisition, AT&T and Interwise will be able to more quickly develop and bring to market capabilities to address the evolving collaboration and communications needs of businesses around the world.

"We are very excited about the opportunities that joining AT&T brings to our organization and to our customers," said Frank Zvi, co-founder, president and CEO of Interwise.

"Interwise has demonstrated its ability to deliver exceptional conferencing and collaboration solutions to some of the largest and most demanding companies in the world. Combining our technology with AT&T's global MPLS-based IP network, sales and marketing reach, financial strength and trusted brand is excellent news for our customers. It also creates an unparalleled opportunity for growth and the basis for continued leadership for years to come," said Zvi.

Interwise provides converged, IP-based conferencing solutions for enterprises. Its integrated voice, Web and video conferencing system has been repeatedly recognized by industry analyst firms and publications for its market-leading integration of VoIP- and TDM-based audio and its leadership in meeting the user and IT needs of large, global enterprises. In addition to offering on-premise and fully hosted conferencing, Interwise offers a unique, hybrid solution that allows enterprises to receive the cost and security benefits of on-site software with the rapid startup, geographic reach and capacity protection of its hosted service.

IT research firm Frost & Sullivan estimates that the total conferencing segment (audio, video, and web conferencing included) represents a $5.9 billion segment worldwide in 2007, and expects the segment to continue to experience significant growth. (Source: Frost & Sullivan.)

This strong demand for conferencing reflects the value it delivers to enterprises in helping them foster and enable more collaborative, higher performing workplaces. Interwise customers are taking advantage of its uniquely scalable technology to offer unlimited voice conferences, Web meetings, virtual classes, Web seminars, Webcasts and recordings to tens of thousands of employees at a time, as a corporate standard tool on every desktop. Enabling employees to treat voice, Web and video conferencing like e-mail enables the whole organization to participate in lowering costs, improving agility and making decisions with their colleagues, customers, partners and suppliers anytime, anywhere around the world.

With headquarters in Cambridge, Mass., Interwise today employs approximately 150 people and operates in the United States, Europe and Asia with offices in six countries.

AT&T is among the leading conferencing providers in the world. The company provides a suite of conferencing services that support the operations of customers ranging from small and medium businesses up to the largest global corporations.

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About AT&T
AT&T Inc. is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at www.att.com.

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