Believing that ISTEL would be better positioned for growth if it operated under the aegis of a larger, like-minded firm, ISTEL's board of directors searched for months for a suitable parent company. Finally, in October 1989, a deal was struck with AT&T, and the renamed AT&T ISTEL began a new era.
The alliance quickly proved advantageous to ISTEL, allowing it access to many new opportunities within AT&T's large, international client pool. Even as economic recession worsened, ISTEL continued to grow, opening two new business units in the United Kingdom: AT&T ISTEL Global Messaging Services Limited and AT&T ISTEL Computer Services Limited. By the end of 1990 revenues had reached £131 million.