DALLAS, TEXAS, July 27, 1998 - Allegiance Telecom, Inc. announced that it has implemented permanent local number portability (LNP) in New York with Bell Atlantic and in Texas with Southwestern Bell. Permanent local number portability is an important issue to competitive local exchange carriers, like Allegiance, because it helps to make the transition from one service provider to another seamless. It also enhances Allegiance's product offerings, since customers no longer have to face the inconveniences of the industry's temporary (interim) number portability approach of remote call forwarding (which limits the number of enhanced features that customers may obtain).

Permanent local number portability will also be available when Allegiance begins selling in the Chicago and Los Angeles markets later this summer. It will be instituted in Atlanta as soon as it becomes available to all local exchange carriers, which is scheduled for the end of August 1998. Allegiance plans to implement permanent LNP in all of its targeted markets.

"Having full-fledged permanent local number portability at this early stage positions Allegiance to take advantage of the tremendous market opportunity available to qualified competitive local exchange carriers," said Royce Holland, chairman and CEO of Allegiance Telecom.

"The rapid implementation of LNP in New York and Texas was facilitated by our state-of-the-art operations support systems (OSS). Allegiance is now well positioned to process more orders simultaneously and will further improve that ability with the establishment of electronic bonding with the incumbent local exchange carriers later this year."

Allegiance Telecom is a competitive local exchange carrier headquartered in Dallas, Texas. The Company offers businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission, and Internet services. Allegiance is targeting 24 major metropolitan areas in the U.S. with its "one-stop shopping" approach. In addition to the Atlanta, Dallas, and New York markets where the Company has already begun to provide service, other markets scheduled for initial service in 1998 include Boston, Chicago, Ft. Worth, Los Angeles, Northern New Jersey and San Francisco. The Company's web address is: www.allegiancetele.com.