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AT&T: AT&T Mobility Obtains Permanent Injunctions Against Prepaid Mobile Phone Traffickers

/noticias.info/ Atlanta, Georgia, July 14, 2008

AT&T Mobility LLC — a subsidiary of AT&T Inc. (NYSE:T) — today announced it has obtained final judgments and permanent injunctions against defendants in two federal lawsuits that were part of ongoing efforts to combat the unauthorized bulk purchase and resale of AT&T's prepaid mobile phones, SIM cards, and accessories, a practice that can be harmful and misleading to consumers.

Prepaid wireless handset diversion is an industry-wide issue. Middlemen typically buy prepaid mobile phones in bulk, remove them from their original packaging, discard warranties and manuals, hack into the phones' software and then resell the phones and accessories to unsuspecting customers at a substantial profit.

As a result of this trafficking, consumers may be misled about the source and origin of their mobile phones, and they are sold phones without their manufacturer's warranties, accessories or user manuals. Because the phones may still carry AT&T branding, consumers may mistakenly believe they are purchasing handsets still covered by original warranties.

"We believe this is wrong, it's illegal, and it's bad for consumers," said Judy Cavalieri, vice president of marketing and head of AT&T's prepaid phone products. "We continue to investigate and will take aggressive action against those we find are involved."

In order to make prepaid phone service affordable for customers, AT&T subsidizes the cost of certain GoPhone® prepaid handset models, and recoups the subsidy through the sale of airtime.

"Prepaid handsets provide a viable, affordable option for customers who choose not to purchase a postpaid plan," Cavalieri said. "We're able to offer these GoPhone handsets at such great discounts only if they're used as intended on our network."

A stipulated final judgment and permanent injunction was entered on July 10 by the U.S. District Court for the Southern District of Florida in Miami against Miranda Holdings Corp., doing business as Incomtel; Jeremy Lara; Home Secrets Corp.; and Josue Leon.

In addition, a stipulated final judgment and permanent injunction was entered on June 26 by the U.S. District Court for the Southern District of Texas in Houston against Rafiq Wazir Ali, doing business as Fone Xchange. Both judgments held that the defendants' conduct violated numerous state and federal laws, and permanently prohibited them from engaging in any activities in any way related to the bulk purchase and resale of AT&T prepaid phones and from using the AT&T or GoPhone trademarks without AT&T's authorization. In the Incomtel case, $5 million in damages was awarded to AT&T.

The judgments conclude two of seven lawsuits AT&T has filed against companies and individuals in Texas, Florida and New York to make them stop engaging in this activity. The company expects to file additional lawsuits as it continues to aggressively investigate and combat the issue.

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. In 2008, AT&T again ranked No. 1 on Fortune magazine's World's Most Admired Telecommunications Company list and No. 1 on America's Most Admired Telecommunications Company list. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com.

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