Competitive Provider for Businesses Serves 27 U.S. Markets

TAMPA, FLORIDA, November 28, 2000 - Telecommunications services are a major recurring expense for small and medium-sized companies, but with the arrival of Allegiance Telecom, Inc., business owners in the Tampa metropolitan area now have an economical alternative for all telecom-related services. Allegiance is targeting small and medium-sized businesses in Hillsborough and Pinellas counties in the Tampa Bay area, providing local, long distance, international calling, high-speed data transmission, Internet and electronic commerce packages. Tampa is the Company's second market in Florida as Allegiance initiated service in the Miami area in June 2000.

This announcement fulfills Allegiance Telecom's business plan for 2000, calling for 27 U.S. markets. Nine additional markets in 2001 will complete Allegiance's fully funded 36-market business plan, addressing 57 percent of the total U.S. business communications market of approximately seven million businesses. To date, the Company has installed over half a million lines for business customers.

Allegiance Telecom is a facilities-based competitive local exchange carrier (CLEC), offering businesses a complete package of telecommunications services consolidated on a single bill. The company is targeting 36 major metropolitan areas in the United States with its single source approach for businesses. Allegiance Telecom is currently operational in 27 U.S. markets including: Atlanta, Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, Detroit, Fort Worth, Houston, Long Island, Los Angeles, Miami, Minneapolis/St. Paul, New York, Northern New Jersey, Oakland, Orange County, Philadelphia, Phoenix, St. Louis, San Diego, San Francisco, San Jose, Seattle, Tampa and Washington D.C.

"Business owners in the Tampa area depend on telecommunications services, from basic local dial tone to high-speed Internet access and e-commerce applications," said Joseph D'Amico, Allegiance Telecom national vice president of sales. "Allegiance Telecom is an excellent alternative to incumbent telecom providers; we offer a single source for business telecom services with considerable savings over current bills. With dedicated direct sales and customer care teams supported by superior back office systems, Allegiance brings value to small and medium-sized enterprises previously only offered to large business organizations."

Allegiance Telecom's local sales office is located at 4300 West Cypress, Suite 800, in Tampa and can be reached via telephone: 813.554-1500. Eric Ihlenfeldt serves as the Tampa area vice president.

Allegiance Telecom was founded by Royce J. Holland and Thomas M. Lord in 1997. Previously, Holland was president and one of several co-founders of MFS Communications Company, Inc.; Lord was a managing director at Bear, Stearns & Co. overseeing transactions in the telecommunications, information services and technology industries. 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 about $1 billion and a market value of approximately $13 billion when the merger between MFS and WorldCom was completed on December 31, 1996.

Allegiance Telecom is a facilities-based CLEC based 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.