"One-Stop Shop" Alternative for Small and Medium-Sized Businesses

DALLAS, TEXAS, April 3, 2000 - Allegiance Telecom, Inc. (Nasdaq: ALGX) announced today that it initiated service in St. Louis. The Company will serve small and medium-sized businesses primarily in St. Louis County, including service to the following cities: Bridgeton, Kirkwood, Manchester, Overland, St. Charles and St. Louis.

Allegiance Telecom 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 36 major metropolitan areas in the U.S. with its "one-stop shopping" approach. Allegiance is operational in 20 other markets, including Atlanta, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Fort Worth, Houston, Long Island, Los Angeles, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, San Diego, San Francisco, San Jose and Washington D.C.

"St. Louis businesses deserve a reliable choice for all their telecommunications needs," said Tony Parella, senior vice president of sales and customer care. "Allegiance provides a single source for all telecom services, offering customers the value of state-of-the-art technology, consolidated billing arrangements and excellence in customer care. With dedicated direct sales and customer care teams supported by superior back office systems, Allegiance brings value previously only offered to larger companies."

Allegiance Telecom's local sales office is located at 12655 Olive Street Boulevard, Suite 425, and can be contacted at 314-576-1122.

Allegiance is a facilities-based CLEC 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.