DALLAS, TEXAS, September 22, 1998 - Allegiance Telecom, Inc. (Nasdaq:ALGX) announced that it has implemented permanent local number portability (LNP) in Georgia with Bell South.

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 is already available in Illinois, Texas and New York with Allegiance and will be immediately available when the Company initiates service in Los Angeles later this year. 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 Georgia was facilitated by our state-of-the-art operations support systems (OSS). Allegiance is now well positioned to process more orders simultaneously."

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, Chicago, Dallas, Fort Worth and New York markets where the Company has already begun to provide service, other markets scheduled for initial service in 1998 include Boston, Los Angeles, Oakland and San Francisco. 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.