SAN ANTONIO, TX--(Marketwire - December 18, 2007) - ATSI Communications, Inc. (OTCBB: ATSX) today announced financial results for the first fiscal quarter ended October 31, 2007.

First Quarter Financial Highlights:

--  44% year-over-year revenue growth from $6.5 million to $9.4 million
    driven by an increase in VoIP carrier services traffic of 28% from
    approximately 105,213,932 minutes of voice traffic during the quarter ended
    October 31, 2006 to approximately 134,380,145 minutes of voice traffic
    during the quarter ended October 31, 2007.
--  Record gross profit of $642,000 and 6th consecutive quarter of
    positive cash flow from operations
--  4th consecutive quarter of net positive earnings per share on total
    net income to common stockholders of $35,000 for the quarter ended October
    31, 2007 as opposed to a net loss to common stockholders of $186,000 for
    the same period last year

First Quarter and Recent Operating Highlights:

--  Entered into $3 million accounts receivable financing package with
    Wells Fargo
--  Appointed Joseph M. Troche as Sr. Vice President of Global Sales
--  Became member of Arbinet-thexchange, Inc., a NASDAQ company, to buy,
    sell, deliver and settle VoIP transactions using Arbinet's Internet-based
    electronic platform.

Financial Results

Total revenues were $9.4 million compared to $6.5 million in the first quarter of 2006. Gross profit was $642,000 during the quarter ended October 31, 2007, compared to $513,000 during the first quarter last year. Non-GAAP net income for the first fiscal quarter of 2008 was $185,000 compared to a non-GAAP net income of $245,000 in last year's first fiscal quarter. The Company incurred $519,000 in non-cash expense during the quarter ended October 31, 2007 vs. $429,000 during the quarter ended October 31, 2006. Non-cash expenses incurred during the period include depreciation, amortization, interest, and stock compensation.

Arthur L. Smith, CEO of ATSI stated, "We are extremely pleased with our quarterly results. Our global VoIP strategy continues to pay-off as evidenced by increased voice communications traffic on our network and continued revenue growth. Against this backdrop, our trend for improvement in gross profit has continued and we are optimistic that our commitment to control expenses will contribute to stronger bottom-line results going forward."

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principals, or GAAP, ATSI uses non-GAAP measures of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude non-cash stock-based compensation expenses in accordance with SFAS 123R. ATSI's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of ATSI's on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors.

Net income before non-cash items is not a term defined by generally accepted accounting principles (GAAP) and may not be comparable to other similarly titled measurements used by other companies. Such non-GAAP measures should be considered in addition to, and not as a substitute for, performance measures calculated in accordance with GAAP. The accompanying table includes a detailed reconciliation of net loss reported in accordance with GAAP to net loss before non-cash items.

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 foreign countries.

            (In thousands, except share and per share amounts)

                                                      Three months ended
                                                          October 31,
                                                       2007        2006
                                                    ----------  ----------
       Carrier services                             $    9,402  $    6,499
       Communication services                               25          33
                                                    ----------  ----------
           Total operating revenues                      9,427       6,532
                                                    ----------  ----------

       Cost of services (exclusive of depreciation
        and amortization, shown below)                   8,785       6,019
       Selling, general and administrative expense
        (exclusive of legal and professional fees)         823         571
       Legal and professional fees                          89          58
       Bad debt expense                                      -          23
       Depreciation and amortization expense                40          17
                                                    ----------  ----------
           Total operating expenses                      9,737       6,688
                                                    ----------  ----------

 OPERATING INCOME (LOSS)                                  (310)       (156)
                                                    ----------  ----------

       Debt forgiveness income                              41           -
       Interest income (expense)                           (24)        (28)
                                                    ----------  ----------
           Total other income (expense), net                17         (28)
                                                    ----------  ----------

 NET INCOME (LOSS)                                        (293)       (184)
                                                    ----------  ----------

 LESS: PREFERRED DIVIDEND                                  (12)         (2)
  DIVIDEND                                                 340           -

                                                    ----------  ----------
 NET INCOME (LOSS) TO COMMON  STOCKHOLDERS          $       35  $     (186)
                                                    ==========  ==========

 BASIC INCOME (LOSS) PER SHARE:                     $     0.00  $    (0.01)
                                                    ==========  ==========
 DILUTED INCOME (LOSS) PER SHARE                    $     0.00  $    (0.01)
                                                    ==========  ==========

 DILUTED COMMON SHARES OUTSTANDING                  38,796,275  17,569,410

                                                    ----------  ----------
 NET INCOME (LOSS) TO COMMON STOCKHOLDERS:          $       35  $     (186)
                                                    ----------  ----------
       Non-cash issuance of common stock  and
        warrants for services                               15          46
       Non-cash stock-based compensation, employees        440         315
       Bad debt expense                                      -          23
       Depreciation and amortization                        40          17
       Interest expense                                     24          28
       Debt forgiveness income                              41           -
       Preferred dividend                                  328          (2)

                                                    ----------  ----------
 EXCLUDING NON-CASH ITEMS:                          $      185  $      245
                                                    ----------  ----------

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