Teletouch Subsidiary Progressive Concepts, Inc. (dba Hawk Electronics) and AT&T Reach Tentative Settlement in Mediation – Parties Mutually Agree to Reschedule Arbitration Hearing Start to July 22, 2011

FORT WORTH, Texas--(BUSINESS WIRE)--Teletouch Communications, Inc. (OTCBB: TLLE), a leading U.S. wireless services, cellular, consumer electronics and public safety equipment provider today announced that its wholly-owned subsidiary, Progressive Concepts, Inc. dba Hawk Electronics (“PCI”), held its scheduled May 17, 2011, mediation in the pending binding arbitration proceeding against AT&T (NYSE: T). At the mediation, the parties made significant progress toward reaching a settlement agreement, the final terms of which - if finally agreed upon - will be documented over the next few weeks. No details about the settlement are being made publicly available until final settlement negotiations are agreed to and documented by the parties. To provide adequate time for the anticipated settlement documentation to be completed, the parties agreed to move the arbitration start date from June 13, 2011, to July 22, 2011. In the event that the parties are not successful in reaching mutual agreement on a final settlement agreement, the arbitration hearing will commence on July 22, 2011.

As initially reported on September 30, 2009, Teletouch’s subsidiary, PCI dba Hawk Electronics, the largest remaining Master Distributor and Authorized Services Provider for AT&T cellular products and services in the U.S., initiated legal action against AT&T seeking damages incurred when AT&T prevented the Company from selling Apple, Inc.’s (NASDAQ: AAPL) popular iPhone and other "AT&T exclusive" products and services that PCI contends it is entitled by contract to provide to its customers.

For a more detailed description of the Company’s legal action Notice and detailed Initial Statement of Claim, please refer to the related Form 8-K, filed October 1, 2009 (also available at the Company’s website: www.teletouch.com and on EDGAR at www.sec.gov).

About Teletouch Communications

For over 46 years, Teletouch has offered a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is a leading direct Authorized Service Provider and billing agent of AT&T (NYSE: T) products and services to consumers, businesses and government agencies, as well as an operator of its own two-way radio network and LTR systems in Texas. Teletouch also maintains a distribution agreement with Clearwire (Nasdaq: CLWR), as a provider of advanced 4G and WiMax wireless network services. Teletouch operates a chain of 20 retail and authorized agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, call center operations, and various retail eCommerce websites including: www.hawkelectronics.com, www.hawkwireless.com and www.hawkexpress.com. Through its wholly owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through www.pciwholesale.com and www.pcidropship.com, among other B2B oriented websites.

Teletouch's common stock is traded Over-The-Counter under stock symbol: TLLE. Additional information about the Teletouch family of companies can be found at www.teletouch.com.

All statements from Teletouch Communications, Inc. in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the PSLRA of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While the Company's management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Risk Factors" in the Company’s most recent Form 10-K and 10-Q filings, and amendments thereto, as well as other public filings with the SEC since such date. The Company operates in a rapidly changing and competitive environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement.