Primary Target of Salesforce is Small and Medium-Sized Businesses DALLAS, TEXAS, March 31, 1999 - Allegiance Telecom, Inc. (Nasdaq: ALGX) announced today that it initiated service in the San Jose metropolitan area. The Company will serve the San Jose area through a facilities-based network, with services throughout the surrounding communities.

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 11 other markets, including Atlanta, Boston, Chicago, Dallas, Fort Worth, Los Angeles, New York, Oakland, Philadelphia, San Francisco and Washington D.C.

"We have learned from our experience in other markets that most small and medium-size 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. "Allegiance provides unique value by offering a 'one-stop shop' for all communication needs - voice, data and Internet services -- packaged with consolidated billing arrangements and superior customer service. We offer San Jose businesses a reliable, customer-oriented choice for all telecom services similar to the choices given in the long distance market."

The Allegiance sales office is located at 1740 Technology Drive, Suite 450 in downtown San Jose.

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.