Primary Target of Salesforce is Small and Medium-Sized Businesses

DALLAS, TEXAS, March 11, 1999 - Allegiance Telecom, Inc. (Nasdaq: ALGX) announced today that it initiated service in the Washington D.C. metropolitan area. The Company will serve the District of Columbia through a facilities-based network, with service also extending to Northern Virginia and suburban Maryland.

Allegiance is a facilities-based 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. Allegiance is operational in 10 other markets, including Atlanta, Boston, Chicago, Dallas, Fort Worth, Los Angeles, New York, Oakland, Philadelphia and San Francisco.

"Allegiance is excited to begin offering a reliable choice in telecom services to small and medium-sized businesses in and near the District of Columbia," said Tony Parella, National Vice President of Field Sales. "Through passage of the Telecommunications Act of 1996, the U.S. Congress opened the doors for local telecom competition, allowing users of voice, data and Internet services a choice for their communication needs. Allegiance provides unique value by offering a 'one-stop shop' for all communication needs - packaged with consolidated billing arrangements and superior customer service."

The Washington, DC sales office is located at 1100 15th Street, Suite 200 and the switch site is located at 1120 Vermont NW - Terrace Level 200, both in the District of Columbia.

Allegiance is a facilities-based 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.