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                         SECURITIES EXCHANGE ACT OF 1934

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                            ATSI COMMUNICATIONS, INC.
                (Name of Registrant as Specified in its Charter)


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ATSI                                              NEWS RELEASE
COMMUNICATIONS
                                                  CONTACT: INVESTORINFO@ATSI.NET

                                                  E-MAIL:  INVESTORINFO@ATSI.NET

                                                  WEB SITE:    WWW.ATSI.NET
                                                               ------------


                       ATSI ANNOUNCES REINCORPORATION PLAN
           ANNUAL SHAREHOLDERS MEETING TO BE HELD ON JANUARY 15, 2004

SAN  ANTONIO,  TEXAS,  December 10,  2003, ATSI Communications, Inc. (a Delaware
Corporation)  (ATSI)  (OTC:  ATSC  -  News)  announced  its  restructuring  and
reincorporation  plan  today.  Upon  shareholder  approval,  ATSI  plans  to
reincorporate  in Nevada to provide greater flexibility, simplicity in corporate
transactions, reduced taxes, and the reduction in other costs of doing business.
The reincorporation will also change the Company's capital structure by reducing
the  number  of shares of common stock outstanding, thus improving the Company's
ability  to  raise  capital  and  pursue  strategic  transactions.

ATSI  will merge with, and into, its wholly owned Nevada subsidiary, ATSI Merger
Corporation.  One  share  of  ATSI  Merger Corporation common stock and ten (10)
shares  of  ATSI Merger Corporation Series H Convertible preferred stock will be
issued  for  each  100 shares of ATSI Communications common stock held as of the
effective  date  of  January  25,  2004.  Any  fractional  shares of ATSI Merger
Corporation common stock or Series H Convertible preferred stock will be rounded
up  to  the  nearest  whole  shares.  In  addition,  one  share  of  ATSI Merger
Corporation  preferred  stock,  with  substantially similar rights, preferences,
limitations  and  designations  will  be issued for each share of ATSI preferred
stock  outstanding  as  of  the  effective  date.

Arthur  L.  Smith,  President  and  Chief  Executive  Officer  states,  "This
reincorporation  is  the next logical step in the process of restructuring ATSI.
In  December  2002,  ATSI was forced to idle its network and almost had to close
its  doors.  The  Company then started a vigorous, internal restructuring plan".
Pursuant  to  this  restructuring, in May, ATSI established a partnership with a
group  of  Mexican  investors  headed  by the Bunt family, a principal in a U.S.
based  international  carrier,  Dialmex,  and sold a 51% interest in its Mexican
subsidiary, which holds a long distance concession in Mexico. Dialmex operates a
highly  sophisticated  Cisco Systems' (Nasdaq: CSCO - News) VoIP network and was
recently  ranked 11th in Entrepreneur Magazine's Hot 100 list of fastest growing
businesses in the U.S. Through its agreement with Dialmex, ATSI has successfully
restarted  its  carrier  services  business  and  added several new customers in
recent  months.

In  June,  ATSI  announced that it intended to bring its SEC filings up to date.
This  has  been  accomplished  with  the  Company bringing its quarterly filings
current  in  September  and  filing  its  annual  report  (Form  10-K)  with the
Securities  and  Exchange  Commission on November 13, 2003. The Company has also
significantly  improved  its cost and expense structure by reducing overhead and
continuing  to  control  expenses.



"The  reincorporation  plan  is  essential  for  our  future. ATSI currently has
103,638,890  shares  of  common  stock  outstanding.  The large number of shares
outstanding  makes  administration  of the share transfer records very expensive
and  overly  complicated.  In addition, our shares have been trading at or below
$.05  per  share  making  share  transactions  extremely expensive for our small
shareholders. One of the features of the reincorporation will be a conversion of
100  shares  of  old ATSI common stock into one share of new ATSI common stock,"
says  Smith.

"We also believe that the price of our common stock might have been artificially
depressed  due  to  a practice known as 'naked shorting'. The reincorporation in
Nevada  will  permit us to require the delivery of certificates representing our
shares for exchange in connection with the reincorporation or subsequent changes
in  our capital structure. We believe that naked shorting, and the depression of
our stock price which it may have caused, will be discouraged as a result of the
merger,"  adds  Smith.

The  Company also announced that the 2004 Annual Meeting of Stockholders will be
held  at  10:00  AM  CST  on  January 15, 2004 at the conference hall of the Dr.
Burton  E. Grossman International Conference Center, University of the Incarnate
Word,  4301  Broadway, San Antonio, Texas. The reorganization plan is subject to
the  shareholders'  approval.  All persons owning shares of the company's common
stock  or  the  series A convertible preferred stock on record as of December 5,
2003,  are  entitled  to  notice  and to vote at the annual meeting. The Company
expects  to  commence  mailing  its  Annual  Report  and  Proxy  Statement  to
shareholders on December 19, 2003.

STOCKHOLDERS  MAY OBTAIN A COPY OF THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
AND  A  COPY  OF  THE  ANNUAL REPORT ON FORM 10-K FOR FREE AT THE WEBSITE OF THE
SECURITIES  AND  EXCHANGE COMMISSION, WWW.SEC.GOV.  STOCKHOLDERS SHOULD READ THE
                                      -----------
PROXY  MATERIALS  AND  ANNUAL REPORT BEFORE VOTING ON ANY PROPOSAL AT THE ANNUAL
MEETING  BECAUSE  THEY  CONTAIN  IMPORTANT  INFORMATION.

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. ATSI has clear advantages over the competition through
its  unique  foreign  license in Mexico, interconnection and service agreements,
and  strategic  partnerships.

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.