American TeleSource International Executes Agreement With Miditel; ATSI's Newest Mexico Teleport Facility Now Operational.

SAN ANTONIO--(BUSINESS WIRE)--May 5, 1998--American TeleSource International Inc. (OTCBB: AMTI) has executed a facilities-based interconnection agreement with Miditel S.A. de C.V., a concessionaire licensed in Mexico to compete against Telmex, the previous Mexican long distance monopoly.

Miditel is primarily focused on providing both local and long distance services to the rural regions of Mexico, which consist of over 20,000 small communities populated by more than 10 million people. ATSI anticipates the Miditel network to be operational during May 1998.

Miditel anticipates the installation of approximately 5,000 public telephones over the next three years throughout Mexico's rural communities. The agreement will allow ATSI to provide direct dial and operator service assistance for calls made from these telephones, utilizing ATSI's San Antonio International Teleport.

Arthur L. Smith, president of ATSI, stated, "I am very excited to sign this agreement with Miditel, as ATSI is a perfect complement to Miditel's expansion plan. Through the San Antonio International Teleport, each of Miditel's public telephones can be linked directly to the U.S. public switched network as well as an ATSI Spanish-speaking operator. Telephone service is scarce in many of these communities, and we are pleased to work with Miditel to broaden the availability of telecommunication services in these underserved markets. Additionally, this agreement allows us to participate in the rural markets of Mexico without deviating from our strategic plan which focuses on the resort areas of Mexico."

In addition, ATSI reports that its newest teleport facility in Mexico is now operational. Randy Poole, Chief Operating Officer, stated, "With the installation complete, the Company anticipates a positive impact on revenues for the fourth quarter ending July 31, as capacity for this facility has been entirely pre-sold."

ATSI specializes in the delivery of high-quality telecommunications services to underserved Latin American markets, and it owns the San Antonio International Teleport. ATSI provides networks for voice, data, fax, and Internet, as well as call services for domestic and international long distance. ATSI's corporate headquarters are located in San Antonio.

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Certain statements contained herein including the statement regarding fourth quarter revenues are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based upon the belief of the Company's management, as well as assumptions made beyond information currently available to the Company's management. Because such forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, insufficient demand for services and inability to afford or pay for services and any other relevant factors, the inability to obtain additional capital to finance network services operations and expansion, loss of key personnel, unavailability of leased transmission facilities associated with providing network services, damage, loss or malfunction of