Primary Target of Salesforce is Small and Medium-Sized Businesses

DALLAS, TEXAS, November 30, 1998 - Allegiance Telecom, Inc. (Nasdaq: ALGX) announced today that it initiated service in the San Francisco metropolitan area. The Company is deploying a facilities-based network in San Francisco, with services throughout the surrounding suburbs.

Allegiance is a competitive local exchange carrier (CLEC) that offers businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. The Company is targeting 24 major metropolitan areas in the U.S. with its "one-stop shopping" approach. In addition to the Atlanta, Chicago, Dallas, Fort Worth, Los Angeles and New York markets where the Company has already begun to provide service, other markets scheduled for initial service in 1998 include Boston and Oakland, California.

"We have learned from our experience in other markets that most small and medium-sized businesses do not realize that they now have a choice in who provides their local telephone service," said Tony Parella, National Vice President of Field Sales. "At Allegiance we have a product offering that goes beyond local telephone service-we offer businesses a 'one-stop shop' for all communication needs, including voice, data and Internet services. Small and medium-sized businesses in the Bay Area will also benefit from Allegiance's consolidated billing arrangements and superior customer service."

The San Francisco sales office is located at 475 Sansome, Suite 2001, and the switch site is located at 651 Brannon Street, Suite 310. Both locations are in downtown San Francisco.

Allegiance is a competitive local exchange carrier headquartered in Dallas, Texas. The Company's web address is www.allegiancetele.com. Allegiance's common stock is traded on the Nasdaq National Market under the symbol ALGX.

NOTE TO EDITOR: Royce Holland, chairman and CEO of Allegiance Telecom, was one of the original founders of MFS Communications Company, the first major competitor to the Bell System. As president of MFS, Holland was an industry leader in developing the competitive provisions of the Telecommunications Act of 1996, which opened the local exchange market to competition throughout the U.S. Under Holland's leadership, MFS grew from a privately held start-up operation to one of the Nasdaq 100 Index companies with annual revenue of approximately $1 billion and a market value of approximately $13 billion.