ATSI Announces Significant Cost Reduction Measures for ATSI de Mexico S.A. de C.V.; SG&A Reduced 19% in Mexico Operations.

Business Editors & High-Tech Writers

SAN ANTONIO--(BUSINESS WIRE)--Oct. 28, 2002

ATSI Communications Inc. (AMEX:AI) announced that as part of its cost reduction initiatives, the Company has reduced SG&A 19% in its Mexico operation, ATSI de Mexico S.A. de C.V.

As reported in the third quarter conference call the company identified twenty communication centers that were deemed under performers. These non-profitable centers have been closed. In addition, the company reduced headcount by eliminating several executive management positions.

This first stride is key to the Company's 4-step strategy to build the value of its retail operations that includes:

1. Streamlining the operations of its network of retail communication

centers, by eliminating unprofitable or poorly located centers and

upgrading operating and reporting systems and equipment.

2. Maximizing revenue and profitability from remaining Communication

Centers and core products by adding telephone lines and fax

machines where demand is increasing, implementing promotional

rates, adding Internet service and reducing transport costs.

3. Selectively launching new products and services such as a

proprietary prepaid calling card and other international services

tapping into the purchasing power of Hispanics in the U.S., while

utilizing the Communication Centers as a distribution channel.

4. Standardize the optimal Communication Center and roll out a growth

plan for additional stores.

Stephen M. Wagner, President and CEO of ATSI stated, "The process for fine tuning the retail services business segment has been time consuming but a necessary process and will benefit the bottom line for the Company. In addition, we feel that the organizational changes in Mexico are the right course of action for ATSI to improve our cost structure in Mexico and to enhance the unit's efficiency."

ATSI Communications Inc. is an emerging international carrier serving the rapidly expanding niche markets in and between Latin America and the United States, primarily Mexico. The Company's borderless strategy includes the deployment of a "next generation" network for more efficient and cost effective service offerings of domestic and international voice, data and Internet. ATSI has clear advantages over the competition through its corporate framework consisting of unique licenses, interconnection and service agreements, network footprint, and extensive retail distribution.

This news release contains forward-looking statements. These statements describe management's beliefs and expectations about the future. We have identified forward-looking statements by using words such as "expect," "believe," and "should." Although we believe our expectations are reasonable, our operations involve a number of risks and uncertainties, and these statements may turn out not to be true. More detailed information about ATSI Communications Inc. is available in the Company's public filings with the Securities and Exchange Commission.