American TeleSource International Inc. Executes Pay Phone Agreement with Cabo San Lucas.

SAN ANTONIO, TEXAS--(BUSINESS WIRE)--Oct. 8, 1997-- (CDN ATIL, OTC Bulletin Board AMTUF ) American TeleSource International Inc. ("ATSI") has executed an agreement with the municipality of Cabo San Lucas, to install and operate pay telephones on public property throughout the city. Situated on the Pacific Ocean, the Cabo San Lucas area is quickly becoming one of Mexico's most popular resort and fishing destinations.

Arthur L. Smith, president of ATSI states, "ATSI is the first licensed pay phone operator in Mexico to execute a municipality agreement in all of Baja California. ATSI currently operates public phones throughout Cabo San Lucas on privately owned properties such as hotels and restaurants. This agreement has allowed us to secure public property locations like that owned by FONATUR, a government owned tourism agency, which operates one of Mexico's largest marinas located in Cabo."

Since May of 1997, ATSI has executed similar agreements with several Mexican resort cities, including Cancun, Puerto Vallarta and Huatulco. ATSI was the first licensed pay phone provider to have secured a municipality agreement within Mexico.

ATSI, specializing in the delivery of high-quality telecommunications services to under served Latin American markets, is the owner of 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, with corporate headquarters in San Antonio, Texas, currently trades under the symbol "ATIL.CDN" on the Canadian Dealing Network (CDN) in Toronto.

CONTACT: American TeleSource International Inc.

Don L. Merrill, Jr., 210/ 558-6090

210/ 558-6095 (FAX)

http://www.atsi.net