AT&T and DIRECTV End Marketing Agreement.

LOS ANGELES & NEW YORK--(BUSINESS WIRE)--Dec. 8, 1997--

Companies enter into new arrangement

AT&T sells back DIRECTV equity

AT&T and DIRECTV Inc., a unit of Hughes Electronics Corp., today announced they have ended their marketing agreement to distribute the DIRECTV(R) direct-broadcast television service and DSS(R) equipment through AT&T.

AT&T and DIRECTV entered into their original marketing agreement on March 25, 1996 to enable AT&T to provide its customers with special incentives on DSS equipment purchases. Under this agreement, AT&T invested $137.5 million for a 2.5 percent equity stake in DIRECTV and options to purchase up to an additional 27.5 percent equity stake.

With the termination of the agreement, AT&T is selling back its 2.5 percent equity stake for $161.8 million. The remaining equity options and exclusivity provisions of the original agreement have been canceled.

The two companies have entered into a new arrangement through which all DIRECTV customers who are or become AT&T customers will be entitled to one free, specially designated pay-per-view event each quarter in 1998.

"DIRECTV has been a big hit with the AT&T customers who subscribe to it," said Donald E. Herr, vice president of alternate channel development and direct-broadcast satellite marketing in AT&T's consumer markets division.

"However, we found that the vast majority of consumers prefer to purchase the DSS equipment directly through consumer electronics retailers. Now they will be able to do so and still get special benefits for being customers of DIRECTV and AT&T.

"Today's announcement is part of our aggressive effort to focus on businesses central to our strategy of providing people with 'any distance' communications services -- long distance, wireless, on-line, and local," Herr said.

"AT&T has provided significant promotion of the DIRECTV brand and helped spread the word about the advantages of satellite television to its customers," said Lawrence N. Chapman, executive vice president of DIRECTV Inc.

"This new arrangement will enable DIRECTV to continue building its subscriber base by strengthening our sales and distribution channels, while AT&T customers who subscribe to DIRECTV will continue to get special benefits for doing so through 1998," he said.

AT&T Corp. is the world's premier communications and information services company, serving more than 90 million customers, including consumers, businesses and government. It runs the world's largest, most sophisticated communications network and is the leading provider of long distance and wireless services. AT&T can be visited on the World Wide Web at www.att.com.

DIRECTV is the United States' leading direct-to-home satellite television entertainment service. DIRECTV delivers 175 channels of entertainment, sports, news and family programming to more than three million subscribers nationwide. DIRECTV and DSS equipment are available in more than 26,000 retail outlets nationwide, including Circuit City, Best Buy, K-Mart and Radio Shack. Visit DIRECTV on the World Wide Web at www.directv.com.

DIRECTV and DSS are trademarks of DIRECTV Inc., a unit of Hughes Electronics Corp. The earnings of Hughes Electronics are used to calculate the earnings per share attributable to GMH (NYSE symbol) common stock.

CONTACT: AT&T

Mark Siegel, 908/221-8422 (office)

973/989-1101 (home)

Internet: masiegel@attmail.com

or

DIRECTV

Jeff Torkelson, 310/535-5062 (office)

562/691-7985 (home)