DALLAS, TEXAS, February 29, 2000 - Allegiance Telecom, Inc. (Nasdaq: ALGX), a competitive local exchange carrier, announced that Goldman, Sachs & Co., Salomon Smith Barney Inc., and Bear, Stearns & Co. Inc., as representatives of the several underwriters in Allegiance's recently completed public offering, have purchased today an additional 803,109 shares of common stock, at a price of $70 per share, pursuant to their over-allotment option. The additional net proceeds to Allegiance are $54,113,484.42. The number of shares purchased and the exercise price have been adjusted to reflect Allegiance's 3-for-2 stock split.

Allegiance currently intends to use the net proceeds of the offering to fund the costs of its expanded business plan and may also use a portion of the net proceeds for other general corporate purposes, including acquisitions.

The offering may be made only by a written prospectus meeting the requirements of Section 10 of the Securities Act of 1933 and this news release shall not constitute an offer to sell or the solicitation of an offer to buy. Copies of the prospectus relating to the offering can be obtained from Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004 (telephone: 212-902-1000), Salomon Smith Barney, 388 Greenwich Street, 37th Floor, New York, NY 10013 (telephone: 212-816-6000) or Bear, Stearns & Co. Inc., 245 Park Avenue, New York, NY 10167 (telephone: 212-272-2000).

Allegiance offers businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. Allegiance is targeting 36 major metropolitan areas in the U.S. with its "one-stop shopping" approach. Allegiance's web address is: www.allegiancetele.com.