DALLAS, June 18, 2002 -- Allegiance Telecom, Inc. (Nasdaq: ALGX), a leading integrated communications provider, through its subsidiaries, has acquired WorldCom, Inc.'s (NASDAQ: WCOM, MCIT) customer premise equipment (CPE) provisioning business and its CPE maintenance business. The aggregate purchase price was $30 million in cash.

Together, these businesses represent one of the largest providers of CPE maintenance service and one of the largest CPE distributors in the U.S., with more than 5,000 customers nationwide in more than 7,000 locations. The businesses operate in 34 major US markets, 25 of which are also served by Allegiance.

The acquisition of these businesses accelerates Allegiance's emphasis on integrated service offerings to businesses using state-of-the-art CPE. Allegiance's integrated access services now account for approximately half of all the company's sales. It also strategically enhances Allegiance's growing national accounts business as nationwide or regional customers seek "One source for business telecom™". With these transactions, Allegiance now offers a truly complete communications solution to corporate customers, including local and long distance voice, and Internet access services, now bolstered by a full suite of customer premise communications equipment and service offerings.

"Business customers want to deal with a communications equipment distributor and service provider that works hand in glove with their communications service provider to get the best possible service at an economical price," said Royce Holland, chairman and CEO of Allegiance Telecom. "With the acquisition of these businesses, Allegiance Telecom is firmly established as a convenient and economical single source provider for all communications needs in the small and medium sized business market, both services and equipment sales."

"The communications business is still won or lost in the field where the quality of your field service personnel can make a big difference. Through this acquisition we are adding more than 400 experienced field technicians and I expect this to enhance the quality of our customer service across all of our product and service offerings," said Holland.

"In addition to the strategic fit offered by these acquisitions, they meet the strict financial criteria we have been faithful to since day one in our ongoing acquisition program," said Thomas Lord, Allegiance Telecom executive vice president for corporate development and chief financial officer. "The businesses are expected to be EBITDA accretive, require minimal capital expenditures and add no material debt to our balance sheet. The equipment service business performs consistently with our core communications service business and will form an integral part of that business. The equipment distribution and provisioning business is a lower margin business but critical to our strategy because we believe our ability to offer state of the art equipment will enhance all of our service offerings."

"The service business is expected to add more than $15 million in quarterly revenue to our overall revenue this year," added Lord. "The equipment distribution and provisioning business - which we are purchasing outside of our existing credit facilities and which will therefore not be included in any covenant calculations - is also expected to add more than $15 million in quarterly revenue."

Based in Dallas, Allegiance Telecom is a national facilities-based integrated communications provider (ICP) offering businesses a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services. Allegiance is currently operational in 36 US markets including Atlanta, Austin, Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, Detroit, Fort Lauderdale, Fort Worth, Houston, Long Island, Los Angeles, Miami, Minneapolis/St. Paul, New York, Northern New Jersey, Oakland, Ontario/Riverside CA, Orange County, Philadelphia, Phoenix, Pittsburgh, Portland, Sacramento, St. Louis, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa, Washington D.C., West Palm Beach/Boca Raton and White Plains, NY. Allegiance's common stock is traded on the NASDAQ National Market under the symbol ALGX.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and the Company intends that such forward- looking statements be subject to the safe harbors created thereby. The words "believes," "expects," "estimates," "anticipates," "plans," "will be", "should" and "forecasts" and similar words or expressions identify forward-looking statements made by or on behalf of the Company. These forward-looking statements were derived using numerous assumptions and are subject to many uncertainties and factors that may cause the actual results of the Company to be materially different from those stated in such forward-looking statements. Examples of such uncertainties and factors include, but are not limited to, the Company's ability to timely and effectively provision new customers; the Company's ability to retain existing customers; the Company's ability to obtain additional financing should it be necessary to do so; the Company's ability to develop and maintain efficient billing, customer service and information systems; and technological, regulatory or other developments in the industry and general economy that might adversely affect the Company. Additional factors are set forth in the Company's SEC reports, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2002. The Company does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.