Series H Conversion Benefits Outlined by ATSI Communications

SAN ANTONIO, TX--(Marketwire - June 20, 2007) - ATSI Communications, Inc. (OTCBB: ATSX) today reported on the benefits of the recent Series H Convertible Preferred Stock conversion and redemption.

In May 2004, the Company issued 14.3 million shares of Series H Convertible Preferred Stock to its shareholders in connection with its re-incorporation in Nevada and recapitalization plan. Each share of the Series H Convertible Preferred Stock could be redeemed by the Company at any time for one share of common stock and could be converted by the holder into 1.2 shares of common stock after one year and into 1.5 shares of common stock after two years. The conversion premium was offered as an incentive to our shareholders to encourage long-term ownership as the Company executed on its strategic plan to build a fundamentally sound business.

On March 5, 2007 the Company announced that it would redeem all shares of the Series H Convertible Preferred Stock that had not been converted by April 26th, 2007. As a result, during the Company's 3rd fiscal quarter 5,824,410 shares of Series H Convertible Preferred Stock were converted by the holders into 8,736,759 shares of Common Stock and 3,081,434 shares of Series H Convertible Preferred Stock were redeemed by the Company for the same number of Common Shares. On a cumulative basis, the total shares of Series H Convertible Preferred Stock issued have been converted to 18,925,675 shares of common stock between May 24, 2004 and April 26, 2007. As a result of the recapitalization that occurred in May 2004, the Company's original shareholders maintained approximately 55% ownership in ATSI, thus accomplishing the main objective of the Series H Convertible Preferred Stock issuance.

ATSI realized the following benefits by redeeming its Series H Convertible Preferred Stock:

--  Eliminated $1.3 million in current liabilities from its Balance Sheet
--  Reversed $600,000 from a previously recorded Preferred Dividend charge
    thus improving 3rd Quarter results
--  Simplified its capital structure that has resulted in improved
    predictability of its common shares outstanding.
    

ATSI President and CEO, Arthur L. Smith, remarked, "Completing the conversion and redemption of our Series H Preferred Stock during the 3rd quarter was a vital initiative towards accomplishing the objective of controlling and managing our common shares outstanding which is critical at our stage of development." Mr. Smith added, "We are pleased the original shareholders that approved our reincorporation in May 2004 have maintained majority ownership of ATSI. The support of our shareholders over the past 3 years has been key in allowing management to build a profitable $27 million global VoIP service provider."

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 NexTone 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 Mexico.

Contact Information: Contact: Jack Eversull The Eversull Group 972-991-1672 972-991-7359 (fax) E-mail: Web Site: www.atsi.net