ATSI Expands VoIP Network With XO Communications

SAN ANTONIO, TX, May 20 (MARKET WIRE) --
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,
"Westructured 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
governmentregulations or other costs associated with data transmission over the
Internet or termination of transmissions in foreign countries.

Contact:
Jack Eversull
The Eversull Group
972-378-7917
972-378-7981 (fax)

E-mail: Email Contact
Web Site: www.atsi.net

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