American TeleSource Reports Status Relating to Third Party Vendor Issues; Lawsuit Initiated in Bexar County, Texas District Court.

SAN ANTONIO--(BUSINESS WIRE)--Sept. 30, 1999--

American TeleSource International Inc. (OTC BB:AMTI) ("ATSI") announced today that while it has enjoyed many positive developments over the past fiscal year, it has suffered a significant setback to anticipated revenues and margins attributable to the failure of PrimeTEC International Inc. (a subsidiary of VarTec Telecom Inc.) to deliver fiber optic capacity.

Under the lease agreement negotiated in late 1998, PrimeTEC was to deliver a quality fiber route to Mexico in January 1999. The delivery of the route in early 1999 was a significant component to ATSI's operational and sales goals for the year.

Despite statements through March from PrimeTEC's President that PrimeTEC would provide the fiber capacity with only minimum delays, ATSI began making alternative arrangements when the fiber had not been delivered. By June 1999, alternative arrangements for fiber capacity and routing to Mexico was obtained via Bestel, S.A. de C.V. (Bestel) as announced in June 1999.

The delay in ATSI obtaining the needed fiber capacity has been responsible for a significant loss of revenues for the period of January through June of 1999. Additionally, incremental costs have been incurred during the second half of fiscal 1999, as the cost to obtain the alternative fiber solution are higher than what had been negotiated with PrimeTEC/Vartec in late 1998.

While the total economic impact to ATSI due to PrimeTEC/Vartec's breaches and misconduct is still being assessed, ATSI believes lost revenues and incremental costs directly attributable to PrimeTEC/Vartec's failure to deliver total well in excess of $15 million.

Although there are contractual limitations in the agreement with PrimeTEC on the type of damages that can be pursued as result of its breach, ATSI has initiated a lawsuit against PrimeTEC International Inc., Vartec Telecom Inc. and the former president of PrimeTec in Bexar County, Texas District Court, and has authorized its attorneys to pursue all relief to which ATSI is entitled under law. ATSI's lawsuit includes claims for tortious interference against Vartec as well as claims for misrepresentation and misconduct against PrimeTEC.

American TeleSource International Inc. is an emerging international carrier serving certain niche markets in and between Latin America and the United States. 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 and data transport.

ATSI has clear advantages over the competition through its corporate framework consisting of unique licenses, interconnection and service agreements, network footprint and extensive distribution channels. ATSI's wholly owned subsidiary, GlobalSCAPE Inc. (www.globalscape.com) is rapidly becoming a leader in electronic commerce of top Internet-based software, utilizing the Web as an integral component of its development, marketing, distribution and customer relationship strategies.