Company Profile

ATSI Communications, Inc. (OTCBB: ATSX) is a global Voice over Internet protocol ("VoIP") communications Company based in San Antonio, Texas. The Company operates through its two wholly owned subsidiaries, Digerati Networks, Inc. and Telefamilia Communications, Inc. 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 similar to those owned by AT&T's and MCI's subsidiaries in Mexico. ATSI is focused on serving high-growth international markets with an emphasis on the Latin American region. ATSI's primary market, Mexico, is the top producer of voice communications traffic with the U.S., making it the most lucrative telecommunications corridor in the world in terms of revenue. Some of the catalysts fueling growth throughout Latin America include the rapid expansion of the Hispanic population in the U.S., the increase in travel between Latin American countries and the U.S., the build-out of local telecommunications networks resulting in an increase in teledensity in Latin countries, and the proliferation of communication devices throughout the region. The Company's customer base includes a variety of carriers, including top tier providers and emerging operators that generate voice traffic to and from the markets served by ATSI.

Company Background

From its inception, ATSI's long-term strategy was to position itself to take advantage of business opportunities that the Company felt would arise with the deregulation of the telecommunications industry within Latin America, particularly Mexico. The scheduled demonopolization of Telmex was written into law in 1990 and Telmex was scheduled to lose its monopoly status in August 1996.

The new laws formalized methods by which companies such as ATSI could compete in the Mexican long distance market. Management believed that by establishing its infrastructure in advance of the anticipated demonopolization, it could take maximum advantage of opportunities that it expected would emerge. ATSI began providing network management services between the U.S. and Mexico and call services from Mexico to the U.S. in 1995.

In July 2000, ATSI secured its valuable Long Distance Concession license in Mexico, and officially began operations under the Concession in Mexico as ATSI Comunicaciones, S.A. de C.V. In June 2003, ATSI established a relationship with a group of Mexican investors that subeseuently acquired a 51% interest in its Mexican subsidiary.

ATSI deployed the capital from the sale of its Mexican Subsidiary to deploy a NexTone powered VoIP network and diversify its routes to include other countries in Latin America and other regions of the world. Since deploying its own VoIP network in July 2004, ATSI has experienced dramatic growth and produced record revenues for every quarter through its fiscal year ended July 31, 2006.

Today, ATSI is well positioned to capitalize on the growth opportunities in a rapidly expanding VoIP market. In 2005, VoIP traffic represented 16% or 42 billion of the 260 billion international minutes processed. As a region, Latin America was the most popular destination in the world for VoIP traffic in 2005.