SOURCE: ATSI Communications

ATSI Communications

June 11, 2009 09:00 ET

ATSI Provides Update on Recent Initiatives

SAN ANTONIO, TX--(Marketwire - June 11, 2009) - ATSI Communications, Inc. (OTCBB: ATSX) today provided an update on the Company's 3rd fiscal quarter initiatives to remedy the challenges that were primarily created by the weak economy during the 1st and 2nd fiscal quarters.

As previously reported, ATSI's market shift towards improved quality for global VoIP services required the Company to hold its suppliers to a higher standard on international routes. During the third quarter of FY2009, the Company began a rigorous effort to improve call quality and the average call duration ("ACD") of calls processed on its network. These measures included eliminating vendors from its routing and streamlining many of the routes offered to its customers. As of April 30, 2009, the Company had eliminated 20% of its vendors which resulted in the exclusion of 24 underperforming vendors from its global routing. In addition, on individual routes where call statistics fell to unacceptable levels, the Company blocked VoIP traffic. These actions have already produced the benefits anticipated including a 55% improvement in ACD quarter over quarter. The Company expects that the improvement in ACD will positively influence the business long-term and favorably impact future revenues as each completed call will represent a larger number of billed minutes.

During the 3rd quarter, the Company deployed a VoIP technology platform to introduce new and enhanced VoIP services that includes fully hosted IP/PBX services, IP trunking, call center applications, prepaid services, and customized VoIP solutions for specialized applications. In May, the Company provisioned its first account on the enhanced platform consisting of a VoIP network to 154 cities for a Fortune 500 company. The network provided includes an interactive voice response auto attendant, call recording, simultaneous calling, voicemail to email conversion, and multiple other IP/PBX features in a hosted environment. ATSI, as an outsourced VoIP technology enabler, is marketing these new and synergistic services to other carriers and to enterprise customers through established channel partners. With a current market value of over $11 billion in this sector of the industry, management believes there is a significant market opportunity for ATSI's diversification strategy.

As reported in its 2nd quarter earnings release, the tightening of capital markets has reduced the credit worthiness of certain existing and prospective customers. In addition to processing all eligible accounts through its accounts receivable insurance provider, the Company has continued enforcing its strict credit policies to minimize risk in a tough economic climate. Even under its strict credit policy, the Company has approved several medium and top tier carriers for credit and successfully increased its customer base by 10% during the 3rd quarter.

Arthur L. Smith, CEO of ATSI, stated, "Despite the tough economic conditions, we were able to improve on a key business metric in our industry (ACD) and increase our volume of minutes by 20% month over month during the 3rd quarter. Although the actions taken impacted revenues, the improvements indicate we are heading down the desired long-term path of building a more consistent, stable, and reliable global network. We are very encouraged by the demand for our new enhanced services introduced during the 3rd quarter. We expect these higher margin services that utilize our core network infrastructure to be an important revenue & profit generator in the future."

ATSI Communications, Inc. operates through its wholly owned subsidiary, Digerati Networks, Inc. Digerati Networks 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. 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