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Internet Initiative Japan to Acquire Domestic Networking Operations in Japan from AT&T


AT&T to focus on serving multinational corporations in Japan

Tokyo, Japan, AT&T* and Internet Initiative Japan Inc. (NASDAQ:IIJI) announced today an agreement for IIJ to acquire AT&T Japanís operations focused on domestic Japanese outsourcing services, including approximately 1,600 domestic Japanese business customers and approximately 250 AT&T employees who support these customers. AT&T, through its existing local entities, will continue to serve the global needs of multinational corporations (MNCs) with operations in Japan.

Todayís agreement reinforces AT&Tís strategic focus on providing managed global connectivity and application services for MNCs and complements IIJís strategy of expanding its portfolio of domestic services and customer relationships.

AT&T will continue to maintain a strong presence in Japan, including substantial operations and employees dedicated to AT&T Global Network infrastructures in Japan. The sale does not involve AT&Tís infrastructure in Japan, which includes four global network service nodes, remote access infrastructure for corporate clients, an Internet Data Centre and significant international subsea cable capacity. In addition to managed global connectivity services, AT&Tís retained business in Japan also provides an advanced portfolio of value-added services such as hosting, mobile enterprise applications, cloud computing, application management, security, Telepresence and unified communications.

ďJapan is one of the top destinations for our multinational clients and remains an important market for AT&T. We intend to maintain a strong presence in Japan, but it makes strategic sense for us to sell our domestic customer base and supporting operations in Japan to IIJ,Ē said Bernard Yee, vice president AT&T Asia Pacific. ďThe sale will enable AT&T to focus on its core strength ó providing global managed connectivity and application services to multinational corporations that operate on a global basis.Ē

In conjunction with the agreement, AT&T has established a new subsidiary to ensure the smooth transition of customers, employees and business operations to IIJ. After the transaction closes, this new company will become a wholly-owned subsidiary of IIJ. AT&T intends to continue to sell domestic telecommunication services, including IIJ products, to the MNCs it serves that have operations in Japan. And the new company intends to purchase global connectivity services from AT&T to support its Japan-based customersí global communications needs.

The sale price is approximately •9.2 billion, or approximately US$100 million, based on the exchange rate on May 31, 2010. Full-year revenues from the domestic Japanese outsourcing business are estimated at approximately US$300 million for 2010. The companies are targeting completion of the transaction on September 1, 2010.

Contingent upon the close of the transaction, AT&T intends to exercise a call option on NTTís 15-percent stake in AT&T Japan.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates Ė AT&T operating companies Ė are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nationís fastest 3G network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet and voice services. A leader in mobile broadband, AT&T also offers the best wireless coverage worldwide, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verseSM and AT&T |DIRECTVSM brands. The companyís suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising. In 2010, AT&T again ranked among the 50 Most Admired Companies by FORTUNEģ magazine.

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Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&Tís filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.


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