(EMAILWIRE.COM, September 30, 2004 ) CEDAR KNOLLS, NJ - AT&T has announced further reductions in staff and its stock has fallen dramatically in 2004, almost 27%. The investment community has lost faith in AT&T's ability to grow in light of adverse regulatory rulings and the collapse of its consumer long distance business.

"AT&T, while severely weakened, has options ahead of it that benefit the shareholders," said Allan Tumolillo, COO of Probe Financial Associates. "AT&T's aggressive rollout of its CallVantage platform and its alliance with the cable industry for VoIP at least have the potential of growing that end of the business."

"However, AT&T can either position itself to be acquired in a 'friendly' manner by an RBOC or by a consortium of cable operators, or seek out an acquisition of its own," said Tumolillo. "An acquisition by an RBOCs would pull AT&T back from the cable operators, forcing them to invest imediately in VoIP. An acquisition of AT&T by the cable operators would raise the stakes on the telcos in the 'battle of the bundles'."

An intriguing option for AT&T is to acquire MCI, who has retained investment bankers to seek prospective buyers. An MCI/AT&T hook-up would strengthen AT&T in both the Enterprise market and in its dealings with the cable industry.

PFA's new report, "AT&T Comes to the Brink: What Are Its Options?" assesses AT&T's options if it seeks a potential buyer.
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To obtain more information on Probe Financial Associates and its products, contact Karen Verrinder or visit PFA on the web at www.probefin.com.

Karen Verrinder
Tel. 973.734.0109, ext. 227
E-mail: mailto:kverrind@probegrp.com

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