Exhibit 10.2
                                                                    ------------


              CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE
              ----------------------------------------------------


     ATSI  Communications,  Inc.,  a  Nevada  corporation  ("ATSI"),  formerly a
Delaware  corporation,  and  Infraestructura  Espacial,  S.A. de C.V., a Mexican
corporation ("Infraestructura") (collectively, the "Parties"), hereby enter into
this  Confidential  Settlement  Agreement  and  Mutual  Release (the "Settlement
Agreement").

                                    RECITALS

     WHEREAS,  the  Parties  are  AGREED  that certain relationships between and
among  the Parties should be ended and any and all claims or liabilities between
and  among  them  be  held  for  naught;  and

     WHEREAS,  ATSI  executed  on  March  22,  2001  a  Pledge  Agreement  with
Infraestructura;  and

     WHEREAS,  ATSI  executed  a  replacement  Pledge Agreement on September 12,
2002;  and

     WHEREAS,  Infraestructura  agreed  to  loan  ATSI  $250,000;  and

     WHEREAS,  ATSI  failed  to  pay  Infraestructura;  and

     WHEREAS,  Infraestructura  therefore  collected the security interest under
such Agreement consisting of 357,104 shares of old ATSI (ATSI Delaware) treasury
stock;  and

     WHEREAS,  all  Parties  wish  to  reach  a full and final settlement of all
matters  and all causes and potential causes of action arising from any of their
relationships  with  each  other,  including  any  and all disputes or rights or
potential  rights  between  or  among  the Parties arising from any transactions
between  or  among  them  prior to the execution date of this Agreement, and now
desire  to  set  forth  their  agreement  in  writing.


CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 1
<PAGE>
     NOW,  THEREFORE, in consideration of the foregoing and the mutual covenants
and  agreements  set  forth herein, and further good and valuable consideration,
the  Parties  hereby  agree  and  covenant  as  follows:

1.   PAYMENT.  As  consideration  for  all  amounts  owed  including any accrued
     interest,  ATSI  shall  deliver  to Infraestructura 30,000 shares of ATSI's
     common  stock  (Nevada) post-split (the "Payment"). This Payment is subject
     to the approval of the Board of Directors whose approval shall be sought as
     soon  as  practicable.

     2.  RELEASE  BY  INFRAESTRUCTURA.  In  consideration  of the receipt of the
Payment,  Infraestructura,  with  the  intention  of  binding  itself,  and  its
officers, directors, shareholder, employees, representatives, attorneys-in-fact,
predecessors,  successors and assigns, (the "Infraestructura Releasing Parties")
expressly  releases,  acquits,  and discharges ATSI and its respective officers,
directors,  shareholders,  representatives,  attorneys,  successors, and assigns
(the  "ATSI  Released  Parties")  from all claims, demands, causes of action and
potential  claims  or  causes  of  action,  of  whatever  nature  that  the
Infraestructura  Releasing  Parties  may  have or claim to have against the ATSI
Released Parties arising from or connected with, directly or indirectly, any and
all  claims  the  Infraestructura  Releasing  Parties  may have or claim to have
against  the  ATSI  Released  Parties accruing before the execution date of this
Release.  Notwithstanding the foregoing paragraph, the ATSI Released Parties are
not  released  from  the obligations or indemnities set forth in this Settlement
Agreement.

     2.   RELEASE BY ATSI. In further consideration of the foregoing, ATSI, with
the  intention  of  binding  itself  and  its  respective  officers,  directors,
shareholders,  employees,  representatives,  attorneys-in-fact,  predecessors,
successors,  assigns,  and subsidiaries (the "ATSI Releasing Parties") expressly
release,  acquit,  and  discharge  Infraestructura  and its officers, directors,
shareholders,  representatives,  attorneys,


CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 2
<PAGE>
successors,  and  assigns,  (the  "Infraestructura  Released  Parties") from all
claims,  demands,  and causes of action or potential claims and causes of action
of  whatever  nature  that  the ATSI Releasing Parties may have or claim to have
against  the  Infraestructura  Released  Parties arising from or connected with,
directly  or  indirectly,  any  relationship or transaction between or among the
Parties,  as  well  as  any  and  all  other  or  potential claims that the ATSI
Releasing Parties may have or claim to have against the Infraestructura Released
Parties  accruing  before  the  execution  date  of  this  Settlement Agreement.
Notwithstanding  the  foregoing  paragraph, the Infraestructura Released Parties
are  not  released  from  the  obligations  of  this  Settlement  Agreement.

3.   NO  ADMISSION  OF LIABILITY. This settlement and the Payment made hereunder
     do  not  constitute  an  admission  of  liability  by any Party hereto, and
     liability  is  expressly  denied  by  all  Parties.

4.   CONFIDENTIALITY. The Parties agree that they will not disclose the terms of
this  Settlement  Agreement,  unless  necessary  to  enforce  the  terms of this
Settlement  Agreement  or  after receipt of judicial process or lawful discovery
procedures.  In  the event that any Party is served with notice to disclose such
information  by  subpoena or otherwise, that Party agrees promptly to notify the
other  Parties  in  writing of such notice.  The Party or Parties so notified in
writing  shall  thereafter  undertake  the  cost  and obligation to maintain the
propriety  and  confidentiality  of  the  terms  of  such  information.

5.   NON-DISPARAGEMENT.  The  Parties  agree  to  use  reasonable  effort not to
disparage  or  interfere  with  any  other  Party's  agreements  or  prospective
agreements  with  any  third  party.

6.   ENTIRE  AGREEMENT.  This  Settlement  Agreement  contains  the  entire
understanding  and  agreement  of the Parties hereto with respect to the subject
matters  herein, and may not be amended or modified in any respect other than in
a  writing  which  specifically refers to this Settlement Agreement and which is
signed  by  all  of  the


CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 3
<PAGE>
Parties  hereto.

7.   GOVERNING  LAW.  This  Settlement Agreement was negotiated in, and shall be
governed  by and construed according to, the laws of the State of Texas.  In the
event that any provision herein is deemed not enforceable, the remainder of this
Settlement  Agreement  will  remain unaffected. Venue for any action relating to
the  provisions  of  this  Agreement  shall  be  in  Bexar  County,  Texas.

8.   NO  ASSIGNMENT.  By  signing this Settlement Agreement, each of the Parties
     represents  and  warrants that it has not assigned or subrogated any of its
     claims  or  potential  claims,  in  whole  or  in part, to any third party.

9.   MODIFICATION  AND  ATTORNEY'S  FEES. This Settlement Agreement shall not be
     suspended,  amended,  or  modified in any manner except by an instrument in
     writing  signed  by  all Parties to be bound. Should it become necessary to
     enforce  this Settlement Agreement, or any portion of it, or to declare the
     effect  of any provision of this Settlement Agreement, the prevailing Party
     shall be entitled to recover costs incurred including reasonable attorney's
     fees.

10.  INFORMED  CONSENT.  The  Parties  acknowledge  that  they  have  had  the
opportunity to consult with their respective attorneys regarding the meaning and
effect  of  this Settlement Agreement, and that none of the Parties has made any
representations,  written  or oral, upon which another Party relies in executing
this  Settlement  Agreement.

11.  COUNTERPARTS.  This  Settlement  Agreement  may  be  executed  in  multiple
counterparts.  A  set  of  counterpart  copies  which  collectively contains the
signature  and  acknowledgment  of  all  Parties  shall  constitute an original.

     EXECUTED  by  an  authorized representative of ATSI Communications, Inc., a
Nevada  corporation,  on  the  date  written  below.


CONFIDENTIAL MUTUAL RELEASE     Page 4
<PAGE>
ATSI COMMUNICATIONS, INC.


By:     /s/ Arthur L. Smith
        -------------------
Its: President and CEO
     -----------------
Date:   October 26, 2004
        -----------------

     EXECUTED by an authorized representative of Infraestructura Espacial, S.A.
de C.V., a Mexican corporation, on the date written below.


INFRAESTRUCTURA ESPACIAL, S.A. DE C.V.


By:     /s/ Tomas Revesz
        ----------------
Its: President and CEO
     -----------------
Date:  October 26, 2004
       -----------------


CONFIDENTIAL MUTUAL RELEASE     Page 5
<PAGE>