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For Further Information:
Jane O'Donaghue David Caouette
AT&T Wireless AT&T
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AT&T AND NTT DOCOMO ANNOUNCE STRATEGIC WIRELESS ALLIANCE
CREATE NEW AT&T WIRELESS UNIT TO DEVELOP ADVANCED SERVICES
NTT DOCOMO TO INVEST NEARLY $10 BILLION FOR 16 PERCENT STAKE IN AT&T WIRELESS
AT&T WIRELESS ACCELERATES TRANSITION TO GLOBAL BROADBAND WIRELESS STANDARD
FOR IMMEDIATE RELEASE: THURSDAY, NOVEMBER 30, 2000
NEW YORK AND TOKYO - AT&T and NTT DoCoMo today announced that NTT DoCoMo
will form a strategic alliance with AT&T Wireless to develop the next generation
of mobile multimedia services on a global-standard, high-speed wireless network.
NTT DoCoMo, the leading mobile communications company in Japan, will
invest approximately $9.8 billion for AT&T preferred stock, equivalent to 406
million shares of AT&T Wireless tracking stock (a 16 percent economic interest).
In addition, NTT DoCoMo will acquire five-year warrants to purchase the
equivalent of an additional 41.7 million shares of AT&T Wireless tracking stock
at $35 per share. The tracking stock held by NTT DoCoMo will convert to AT&T
Wireless common stock upon the spin off of AT&T Wireless. AT&T will reduce its
retained interest in the AT&T Wireless Group by 178 million shares and will
receive $20.50 per share from NTT DoCoMo. The balance of the 406 million shares
will come from the issuance of 228 million new primary shares of AT&T Wireless
tracking stock at $27.00 per share.
AT&T Wireless will create a new, wholly owned subsidiary to develop
multimedia applications for its current network and a new, high-speed wireless
network built to global standards for "third generation" (3G) services such as
graphic presentation
<PAGE>
of data, video e-mail, high quality music downloads, and streaming audio and
video. Both companies will share technical resources and support staffing of the
new unit.
AT&T Wireless plans to be one of the first major companies in North
America to deploy such a network based upon the global standard called UMTS
(Universal Mobile Telecommunications System) also known as WCDMA (wideband code
division multiple access). By mid-2001 in Japan, NTT DoCoMo will be the first
carrier in the world to offer advanced mobile multi-media services using WCDMA.
AT&T Wireless plans to be the first national wireless carrier in the United
States to introduce WCDMA services.
"AT&T Wireless has a solid track record of growth, built on the largest
base of high value customers in the industry," said AT&T Chairman C. Michael
Armstrong. "NTT DoCoMo is the world's leader in mobile Internet services.
Combining the strengths of these two industry leaders will speed a new
generation of mobile data services to AT&T Wireless customers throughout North
America. I can't think of a better gift for our customers as we prepare to spin
AT&T Wireless as a separate company."
"This alliance allows AT&T Wireless to realize its vision of creating a
high performing mobile Internet more quickly that we anticipated," said John D.
Zeglis, chairman and CEO of AT&T Wireless. "This brings together two of the most
innovative and dynamic wireless companies with all the right stuff to transform
the industry. NTT DoCoMo has developed a rich mobile Internet experience with 15
million customers, setting a new global standard. AT&T Wireless changed the
competitive landscape in North America and attracted millions of high-use
customers with its Digital One Rate offer. Together, AT&T Wireless and NTT
DoCoMo will take wireless communications to a new place, bringing our customers
leading edge wireless data applications and an exceptional service experience."
"I am delighted to announce that we are launching our business together in
the U.S., the world's largest mobile telecommunications market in terms of
number of subscribers," said Dr. Tachikawa, president and CEO of NTT DoCoMo.
"AT&T Wireless and NTT DoCoMo expect to bring communications to a new level by
combining our experience and prominent expertise in leading-edge wireless data
applications and services."
<PAGE>
As part of the agreement, AT&T Wireless will license from NTT DoCoMo its
i-mode technology platform. The companies will also become partners in the U.S.
and Japan for handling the wireless needs of multi-national companies and
traffic on each other's network. Additionally, both companies expect to benefit
from a buying consortium for network equipment and handsets.
The strategic alliance will implement technology that enables users to
access diverse and superior HTML applications and content on mobile wireless
terminals and to promote common global standards such as Wireless Application
Protocol Next Generation (WAP NG).
As part of the agreement, NTT DoCoMo will obtain a seat on AT&T's Board of
Directors until AT&T Wireless is spun off from AT&T as a separate public company
later next year. At that time, NTT DoCoMo will retain representation on the new
public wireless company's board, and both companies will agree on certain key
executives for the multi-media subsidiary.
AT&T Wireless will use the approximately $6.2 billion it receives from the
share sale to continue executing its strategy to expand its capacity, enlarge
its footprint, create an advanced mobile Internet, and invest in other strategic
growth initiatives, as well as strengthening its balance sheet. AT&T said it
intends to use the remaining $3.6 billion it will receive for debt reduction.
AT&T said that until the time of the planned spin off of AT&T Wireless by
mid-2001, the company will record a non-cash carrying cost on the preferred
stock of just under 7 percent, which will result in a 3 to 4 cent negative
impact to AT&T's 2001 full-year earnings. This excludes any non-cash charges
that AT&T may be required to incur with respect to the warrants but does include
interest expense savings AT&T is expected to realize by reducing its debt.
NTT DoCoMo's investment will be in the form of preferred stock, with each
share equivalent to 500 shares of AT&T Wireless tracking stock. Otherwise, the
preferred stock will have essentially the same economic interest as the AT&T
Wireless tracking stock. As a result of this transaction, excluding the
warrants, AT&T will retain a 69.8 percent economic interest in AT&T Wireless'
operating results, and approximately 14.2 percent of the economic interest in
AT&T Wireless' operating results will continue
<PAGE>
to be represented by the existing AT&T Wireless tracking stock publicly traded
on the New York Stock Exchange.
AT&T also said it is proceeding with its plan to offer AT&T shareowners an
opportunity to exchange their AT&T common shares for AT&T Wireless tracking
stock early in 2001. Later next year, AT&T also intends to complete the spin-off
of AT&T Wireless by exchanging AT&T Wireless common stock for the tracking stock
and distributing a special dividend of AT&T Wireless common stock to AT&T
shareowners.
AT&T WIRELESS ACCELERATES PACE TO GLOBAL WIRELESS STANDARD
AT&T Wireless said it will accelerate the introduction of wireless data
services by overlaying a GSM (Global System for Mobile Communications) / GPRS
(General Packet Radio Service) platform to its existing nationwide network. The
company's deployment of GSM will begin early next year and bring with it the
higher speed data capabilities of so-called "2.5 G" technology, or GPRS, along
with the full array of mobile devices available from vendors for the world's GSM
carriers.
The company will also deploy a high-speed 3G technology known as EDGE
(Enhanced Data rates for Global Evolution) beginning near the end of 2001 and
extending to most of its markets by the end of 2002. AT&T Wireless and its
partners and affiliates already have sufficient spectrum to deploy GSM/GPRS/EDGE
in virtually all of the nation's top 100 markets.
AT&T Wireless will begin deploying the highest performing 3G technology,
UMTS, when equipment and devices become available, sometime in 2002. The
company's existing spectrum licenses, along with its partners and affiliates,
will permit installation of UMTS in more than 70 of the country's top 100
markets in 2003 and 2004 - even before additional spectrum for new markets is
added to the portfolio.
"With this new technology, people will be able to do things with their
wireless devices they never could before," said John Zeglis, chairman and CEO of
AT&T Wireless. "We see a future taking shape where our customers will have
access in their pocket to all the information and all the people of the world,
from wherever our customers happen to be in the world."
<PAGE>
The company said existing customers would continue to receive the same
reliable services they expect from AT&T Wireless because the new network will
not replace its TDMA (Time Division Multiple Access) and CDPD (Cellular Digital
Packet Data) networks. These networks will continue to be supported, maintained
and expanded, as needed, to deliver the reliable, high-quality,
second-generation voice and data services that have made AT&T Wireless an
industry leader.
VENDOR SUPPORT FOR TRANSITION
The company said it will deliver its advanced third generation wireless
services faster than planned, and yet at costs similar to its existing plan,
because of strategic agreements reached with a number of network equipment
vendors, including Nokia, Nortel, Lucent and Ericsson and handset providers,
including Nokia, Ericsson, Siemens and Motorola.
AT&T Wireless expects other members of the AT&T Wireless network, such as
Rogers AT&T Wireless of Canada, and its domestic affiliates Telecorp PCS and
Triton PCS, Inc. to join this strategy. Affiliates and partners of AT&T Wireless
can also take advantage of these agreements and receive similar prices for
equipment and services.
AT&T and AT&T Wireless were advised by Salomon Smith Barney and Credit
Suisse First Boston. NTT DoCoMo was advised by Goldman Sachs.
ABOUT AT&T WIRELESS
AT&T Wireless (NYSE: AWE) operates one of the largest digital wireless
networks in North America. With more than 15 million subscribers (including
partnership markets), AT&T Wireless is committed to being the premier provider
of high-quality wireless communications services, whether mobile or fixed, voice
or data, to businesses or consumers, in the U.S. and internationally
www.attws.com.
The foregoing are "forward-looking statements" which are based on
management's beliefs as well as on a number of assumptions concerning future
events made by and information currently available to management. Readers are
cautioned not to put undue reliance on such forward-looking statements, which
are not a guarantee of performance and are subject to a number of uncertainties
and other factors, many of which are outside AT&T's control, that could cause
actual results to differ materially from such statements. For a more detailed
description of the factors that could cause such a difference, please see AT&T's
filings with the Securities and Exchange Commission.
<PAGE>
AT&T disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. This information is presented solely to provide additional
information to further understand the results of AT&T.
EDITOR'S NOTE: NEW YORK NEWS CONFERENCE AND CONFERENCE CALLS
AT&T will host an analysts' call to discuss the AT&T and NTT DoCoMo strategic
alliance beginning at 9:30 A.M. (Eastern time) today with John D.Zeglis,
chairman and CEO AT&T Wireless Group.
Reporters are invited to listen-only by calling 1-800-230-1093 (US) or
1-612-332-0632 (international). No access code is required. A replay will be
available beginning at 1 p.m. today by dialing 1-800-475-6701, access code
552841 (US) or 1-320-365-3844, access code 552841 (international). The analysts'
conference will also be webcast live over the Internet at www.att.com/ir
http://www.att.com/ir/.
AT&T will hold a news conference at 11:00 A.M. (Eastern time) in the first-floor
auditorium of the company's World Headquarters at 32 Avenue of the Americas.
John Zeglis will make remarks and take questions. Reporters who are unable to
attend in person can participate by dialing 1-800-230-1074 (US) or
1-612-332-0335 (international). No access code is required. The trouble number
is 1-800-932-1100 (US) and 1-612-334-6983 (international). A replay of the news
conference will be available for 72 hours beginning this afternoon at 3 p.m.
(Eastern time) at 1-800-475-6701, access code 553640 (US), or 1-320-365-3844,
access code 553640 (international).
SATELLITE COORDINATES - A satellite feed of the 11:00 a.m. (Eastern time) news
conference in New York is available at the following coordinates: (KUBAND) GE3,
KU/T-19 Horizontal (KU-12080/L-1330MHz) down-link, Audio 6.2 +6.8 MHZ, Orbital
Location: 87 West.
ALSO: Galaxy 3R, Transponder: C/T-11 Horizontal (C-3920/L-1230 MHz)
down-link, C/T-11 Analog (27 Mhz), Audio 6.2 +6.8 MHZ, Orbital Location: 87
West.
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