Exhibit 99.1

                         American Telecom Services CEO
                        Publishes Letter to Shareholders

City of Industry,  StateCalifornia,  August 31, 2006 - American Telecom Services
Inc. (AMEX:  TES), today published a letter to shareholders from Bruce Hahn, the
Company's Chief Executive Officer:

Dear Shareholders,

It has been  approximately  six months  since we  completed  our initial  public
offering in February,  2006. We believed  then,  and believe even more so today,
that if we could  execute  our  strategy we would be  successful  in growing our
revenues   through   expanded   nationwide   distribution   of   our   converged
communications/hardware  solutions.  Our strategy is to design and manufacture a
wide array of  attractively  priced,  feature-rich  phones bundled with pre-paid
long distance for the  traditional  market and the first cordless  multi-handset
Internet  phones,  bundled  with  services,  for the  rapidly  growing  Internet
Telephone  Service  (VoIP-voice over internet  protocol)  markets.  We also have
worked to secure  exclusive  relationships  with providers to create  compelling
service offerings in both categories to offer to the consumer.

We are pleased with our progress towards  implementing this strategy,  which has
enabled  us to begin to offer  competitive  and  consumer-friendly  programs  to
national  retailers  whereby  they  benefit  from the sale of our phones and the
revenue stream from the bundled service offerings.  I'd like to provide you with
an  update on our  progress  in  selling  our  converged  communication/hardware
solutions to national  retailers,  manufacturing a broad line of traditional and
Internet telephones, and enhancing (and expanding) our service offerings.

Expanding Sales & Distribution
As of February,  2006 we had limited  revenues  and only one phone  bundled with
traditional long-distance available in fewer than 600 store locations. After the
offering,  we began to expand  our  distribution  and at June 30, we had  nearly
9,000 stores selling a total of six styles of traditional  phones.  As a result,
revenues for the June quarter increased to $2.8 million. Revenues have continued
to  increase  and from July 1 through  August 11th we have  received  orders for
approximately  $11  million of  phone/service  bundles,  which we expect will be
distributed  to  approximately  15,000  locations by year end. To date,  we have
eight retail partners.

As part of our expanded roll-out we are working closely with the national retail
channels  to develop  national  advertising  programs  and  in-store  promotions
featuring  our product  offerings.  Our  management  team has more than 50 years
combined  experience in brand  building and driving  customers to major national
retail  chains  and their  online  sites.  We believe  over time our  innovative
promotions will create  significant  brand awareness of ATS in  approximately 90
million homes and small businesses.




Increased  Product Offerings and Manufacturing
Our management team has more than 25 years experience sourcing and has developed
hundreds of millions of dollars of consumer  products,  including  phones,  from
placecountry-regionChina. Because of these relationships, the manufacturers have
absorbed the cost of expensive tooling, product design and R&D. We now have five
manufacturing and engineering  partners,  who collectively  manufacture  several
million phones for sale to major telephone  companies and consumer  distribution
partners on a global  basis,  giving us depth and  stability in our product base
for the U.S.  market.  In addition we now have 12 employees in China,  including
engineers,  project management and operations  management,  working closely with
these partners to design and update our phones and monitor their production.  By
the end of this  year we  expect  to have  more  than 15  traditional  and eight
Internet VoIP phone models, as compared with six and one,  respectively,  in the
June quarter.  We have decided to incorporate  DECT 6.0 technology in all of our
hardware.  DECT is related to the GSM cellular  standard  and is a  well-proven,
global standard for millions of cordless handsets. We believe this approach will
provide us with  significant  cost  reductions  (up to 30% due to  economies  of
scale) while providing the consumer with a higher quality voice  connection.  We
are  stressing  this  quality  with our Internet  telephone  trademark  "Digital
Clear." Due to our selection of DECT technology,  the design of our base station
and handsets and other  features,  we believe we will have a price,  quality and
innovation advantage for some time to come.

We have one of the largest  selections of cordless Internet VoIP phones with the
ATA (telephone  adapter) and router  combined in the base of the phones.  We are
patent pending on this user friendly configuration,  which is "plug in and talk"
simple. By removing complex selling and configuration  issues, ATS phones can be
merchandised in a store's telephone department, where most customers (a majority
of whom are women) shop for their phones, as opposed to the computer  networking
sections where a majority of VoIP offerings are currently sold.

Converged Services for Our Retail Partners and Customers
Because our service  provider  partners  handle  customer  service,  back office
support and offer  aggressively  priced  rate  plans,  we believe we have better
control of our  infrastructure  costs than the majority of  traditional  service
providers, allowing us to focus on the distribution of our solutions. We address
the entire range of consumer and small business  markets through our traditional
Pay N' Talk pre-paid long  distance  service  powered by IDT Telecom and our new
"Digital Clear" VoIP phone powered by SunRocket  service for complete fixed line
replacement.  We  provide  free  minutes  and other  incentives  to  familiarize
customers  with and  educate  them on an  estimated  60%+ cost  savings on their
telephone bill.

We will  promote our Pay N' Talk  telephone  service  through two minute  Direct
Response  TV and  Radio  commercials,  retailer  national  ads,  point  of  sale
materials and product  packaging.  Our residential and small business  customers
press a money  saving  "green  button"  when  dialing out of area and  overseas,
taking advantage of our highly competitive service pricing. Pricing includes all
taxes and charges,  and can produce a



savings up to 60% on the long  distance  for the average  household.  The button
connects  callers to our custom  designed Pay N' Talk  platform on IDT Telecom's
network,  and connects calls without the need for any confusing dialing codes; a
patent-pending  process  exclusive to ATS.  Customers are drawn to the button to
utilize their free pre-paid minutes included with every phone, which facilitates
the purchase of ongoing service.

Our Internet VoIP phones  currently come bundled with SunRocket,  an established
VoIP provider.  SunRocket's  pre-paid plans target total fixed line replacement,
or the  addition of a second line,  and are among the best in the industry  with
rates as low as $9.95 per month,  again with no hidden  charges.  We continue to
talk to our service provider partners about expanded service offerings, tailored
programs and improved pricing.

Summary
We believe we are a new type of  communications  company with the  potential for
higher  margins  and ROI than the  majority  of today's  service  providers  and
hardware vendors.  We generate revenues from phone sales as well as the services
purchased by consumers on a recurring, monthly basis, while reducing our capital
requirements  by outsourcing  production to our  manufacturers  and all the back
office support to our service delivery  partners.  By structuring our operations
in this manner, we deploy most of our funds for working capital.

Between now and the end of our year, we anticipate several key events which will
further  demonstrate  execution  of our  business  plan.  We expect to  announce
additional retail partners, which will further augment our distribution network.
In addition, we expect to announce new product technology,  new service partners
and additional converged communication  solutions,  thus expanding the number of
service plans and communication  platforms that are bundled into our current and
developing easy-to-use phones.

While we have a lot of work ahead of us, we are  pleased  with our  progress  to
date. We look forward to updating you during our first earnings conference call,
which will coincide with the announcement of 2006 fiscal year-end financials. We
appreciate your support.

Sincerely,



Bruce Hahn
CEO
American Telecom Services, Inc.

Safe Harbor Statement

Any  statements  in this  press  release  that  are  not  historical  facts  are
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange  Act of  1934,  as  amended.  In some  cases,  you can  identify  those
forward-looking  statements by words



such as "may," "will," "should," "expects," "plans," "anticipates,"  "believes,"
"estimates,"  "predicts,"  "potential,"  or  "continue" or the negative of those
words and some other  comparable  words.  These  forward-looking  statements are
subject to risks and  uncertainties  that could cause  actual  results to differ
materially from  historical  results or those the Company  anticipates.  Factors
that  could  cause  actual  results  to  differ  from  those  contained  in  the
forward-looking  statement  include,  but are not  limited  to,  those risks and
uncertainties  described in the Company's  prospectus dated February 1, 2006 and
the other  reports and  documents  the Company  files from time to time with the
Securities and Exchange  Commission.  Statements  included in this press release
are based  upon  information  known to the  Company as of the date of this press
release,  and the Company assumes no obligation to (and expressly  disclaims any
such obligation to) publicly update or alter its forward-looking statements made
in this press release, whether as a result of new information,  future events or
otherwise, except as otherwise required by applicable federal securities laws.



Contact: Company           Investors:                   Media:
Bruce Hahn, CEO            Brett Maas                   Daniell Ross
(310) 871-9904             Hayden Communications        Comunicano, Inc.
(404) 261-7466             (646)536-7331                (858) 314-2958
Bruce.Hahn@atsphone.com    brett@haydenir.com           dross@comunicano.com