Sage Telecom Enters New Phase of Growth with Acquisition by Silver Point Capital.

DALLAS -- Sage Telecom, Inc. ("Sage") today announced that it has signed a definitive agreement to be acquired by Silver Point Capital ("Silver Point"), a global private investment firm. The transaction, which is subject to regulatory approvals and other customary conditions, is expected to close during the second quarter of 2007. Financial terms were not disclosed.

Sage is one of the nation's largest competitive local exchange carriers (CLEC) focused on residential and small business customers in suburban and rural communities. The privately-held company serves customers across 12 states and is known for its cost-effective local, long distance and Internet services, simple and easy-to-understand calling plans and quality customer service.

In conjunction with the proposed transaction, the Sage Board of Directors and Silver Point have engaged CXO, L.L.C. ("CXO"), a Dallas-based management and advisory services firm, to oversee certain business operations in conjunction with Sage management during the regulatory approval and transition phase. Brian Kushner will lead CXO's activities at Sage, bringing to the company more than two decades of executive management and operations expertise as well as a depth of telecommunications experience. Chris Williams, Sage's President and Chief Financial Officer, will lead the company during the regulatory approval process.

Sage will continue to serve its customers with friendly service and competitive local, long distance and Internet service plans from its Allen, Texas headquarters and service partner locations throughout its operating territory.

"With the backing of a strong financial partner, Sage is ideally positioned to expand its offerings and take advantage of future growth opportunities," said Brian Kushner of Sage Telecom and CXO. "Sage remains committed to being a value and service leader, providing customers with more choices for affordable telecommunications services."

Silver Point said, "Sage Telecom is a well-positioned provider of telecommunications services that will benefit further from an increased commitment of resources to management and infrastructure. We intend to reinvest in the business in support of a targeted growth strategy designed to create value for Sage and its customers."

Many Sage innovations have been widely adopted throughout the industry, such as free Sage-to-Sage customer long distance calling, refer-a-friend monthly fee credits, holiday discounts and Select Services for its best customers. These innovations have placed Sage at the vanguard of customer service and quality, and the company repeatedly has ranked high in customer satisfaction surveys.

About Silver Point Capital

Silver Point Capital is a global private investment firm with approximately $7 billion under management. The Greenwich, Connecticut-based firm provides financing to and invests in companies across all industries.

About Sage Telecom

Sage Telecom, Inc. provides local, long distance and Internet access services to residential and small business customers primarily in underserved rural areas and suburban markets. Founded in 1997, the company is known for providing unparalleled customer service and innovative, competitively-priced offerings. Serving customers in 12 states, Sage Telecom territory includes Arkansas, California, Connecticut, Illinois, Indiana, Kansas, Michigan, Missouri, Ohio, Oklahoma, Texas and Wisconsin. For more information about Sage Telecom services, call 1-888-972-7243 or visit Sage Telecom at www.sagetelecom.net.