AT&T Wins $2.7 Million Contract from The Picture People

Foster City, California, July 5, 2007

AT&T Inc. (NYSE: T) has announced that The Picture People, which operates approximately 175 company-owned portrait studios in more than 30 states, has selected AT&T to deliver high-bandwidth networking services. Under terms of the three-year $2.7 million contract, AT&T will provide Managed Internet Services (MIS), as well as engineering and consulting services.

The AT&T MIS solution offers high speed dedicated access, world-class reliability and optimal performance, scalability and security. The solution will significantly increase network bandwidth at The Picture People's studio locations and will enable the company's transformation from an analog environment to digital.

This shift enables The Picture People to upload its customers' portraits immediately to an online account on the company's Web site, and that option would make it easier for customers to share portraits online with friends and family at no additional charge from The Picture People. The greater bandwidth of the AT&T solution allows faster uploading of higher-resolution portraits online. This, in turn, makes it more likely that customers might purchase additional prints or even create custom products from their portraits.

"With AT&T's help, we have found a way to quickly deliver memorable, high-quality portraits while establishing an archive of high-resolution photos that can be accessed in the future, even if the customer doesn't choose to purchase the photos immediately," said Jimmy Jobe, chief information officer with The Picture People. "This is an enormous customer-service advantage, especially for young people in their 20s and 30s who are not accustomed to waiting for photography and may come to treasure portraits in our archive in the future."

Currently, approximately 165 company locations have been upgraded with T1 lines. The rest of The Picture People's studios will be upgraded by the end of summer 2007.

AT&T MIS provides managed, leading-edge hardware and software, smart-routing capability and continuous performance-monitoring of The Picture People's Internet Protocol services on AT&T's world-class OC-192/OC-48 IP backbone.

Additionally, with AT&T Network Integration Services, AT&T-certified network strategists, engineers and specialists are helping The Picture People overcome the hurdles related to transforming its legacy infrastructure and information technology environments.

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About The Picture People
The Picture People is the only national retail chain that can deliver high-quality finished portraits chain-wide in about one hour. Founded in 1987, The Picture People has quickly become well-known as a leader in creating memorable portraits and making portrait-taking fun for the entire family. To locate a nearby Picture People studio, call 1-800-341-HOUR or visit www.picturepeople.com.

About AT&T
AT&T Inc. (NYSE: T) 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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