ATSI Expands VoIP Network With XO Communications

SAN ANTONIO, TX--(Marketwire - May 20, 2008) - ATSI Communications, Inc. (ATSI) (OTCBB: ATSX) announced today that it has completed the expansion of its VoIP network under an agreement with XO Communications, a subsidiary of XO Holdings, Inc. (OTCBB: XOHO), a leading nationwide provider of voice, data and IP services for businesses and carriers. With this agreement, ATSI has doubled its fixed Internet bandwidth to support future growth, but will also have the ability to increase this fixed capacity by 400% through the "on-demand" capabilities of XO Communications' Ethernet services. The network expansion sets the stage for continued growth during the Company's 4th quarter of the current fiscal year as well as meets the network requirements for ATSI's business plan in its new fiscal year that begins August 1, 2008.

Ruben Caraveo, Sr. Vice President of Technology and Operations, stated, "We structured a very flexible arrangement with XO Communications that meets our near term needs for fixed capacity, but also allows us to increase bandwidth as needed to meet customer demand." Mr. Caraveo further stated, "As we continue our emphasis on optimizing margins, the increased network capacity is fundamental to meeting our financial objectives in FY2009."

ATSI Communications, Inc. operates through its two wholly owned subsidiaries, Digerati Networks, Inc. and Telefamilia Communications, Inc. Digerati Networks, Inc. is a premier global VoIP carrier serving rapidly expanding markets in Asia, Europe, the Middle East, and Latin America, with an emphasis on Mexico. Through Digerati's partnerships with established foreign carriers and network operators, interconnection and service agreements, and a NextPoint powered VoIP network, ATSI believes it has clear advantages over its competition. Telefamilia Communications provides specialized retail communication services that includes VoIP services to the high-growth Hispanic market in the United States. ATSI also owns a minority interest of a subsidiary in Mexico, ATSI Comunicaciones, S.A. de C.V., which operates under a 30-year government issued telecommunications license.

The information in this news release includes certain forward-looking statements that are based upon management's expectations and assumptions about certain risks and uncertainties that can affect future events. Although management believes these assumptions and expectations to be reasonable on the date of this news release, these risks and uncertainties may cause actual events to differ material from managements those contained in this news release. The risks and uncertainties include, but are not limited to, continuing as a going concern, availability and cost of our present vendors and suppliers, and absence of any change in government regulations or other costs associated with data transmission over the Internet or termination of transmissions in foreign countries.

Contact Information: Contact: Jack Eversull The Eversull Group 972-378-7917 972-378-7981 (fax) E-mail: Web Site: www.atsi.net