Zhone Announces High Capacity Ethernet First-Mile Fiber Solution.

OAKLAND, Calif. -- EtherActive(TM) FTTP Products Expand Zhone's EtherXtend(TM) Portfolio to Deliver Cost-Effective High Bandwidth Ethernet Services over Copper or Fiber

Zhone Technologies, Inc. (NASDAQ:ZHNE), a worldwide leading supplier of VoIP and IPTV equipment for copper and

Zhone's new EtherActive Optical Line Terminal (OLT) can support up to 10 subscribers per blade with 10/100/1000Mbps service over either copper or single/dual mode fiber. Zhone's innovative OLT solution allows carriers to mix & match copper and fiber services on the same card.

As part of Zhone's EtherXtend product portfolio, the new EtherActive products allow carriers to deliver Gigabit Ethernet Services directly to homes and businesses. Zhone's EtherXtend products have already received acclaim as being first to market and the market leader in the rapidly growing Ethernet over bonded copper market. Today's EtherActive product announcement expands the EtherXtend product family to include additional Ethernet service options over both copper and fiber access networks. This broad range of Ethernet service solutions are all available on Zhone's highly acclaimed Multi-Access Line Concentrator (MALC), the world's Number 1 market leading Broadband Loop Carrier product.

By operating on Zhone's market-leading MALC platforms, the EtherXtend product family enables carriers to quickly deliver standards based Ethernet services over existing copper or fiber utilizing industry standard EFM technology. Today's announcement of new Ethernet over fiber solutions complements Zhone's market leading bonded Ethernet over copper products. Together, EtherXtend provides compellingly flexible and manageable Ethernet products over copper or fiber from a single platform and using a common management system.

As market leader in its class, the MALC delivers carrier class reliability and scalability of the most widely required services deployed by carriers today including POTS, DSL and legacy special services. By simultaneously offering Ethernet service options on the same chassis, the MALC allows these new services to be added with only the addition of a line card. No overlay network or retraining of technical is staff required.

Also announced today was Zhone's Indoor/Outdoor Residential Gateway including 2/4 Ethernet Ports, 2 FXS Ports to support VoIP services and HPNAv3 over copper or coax to support IPTV services. Importantly, Zhone's leading technology solutions not only set the standard for packet and fiber migration, but also maintain support for current market requirements including both DTMF Touch Tone and Pulse Dialing and Loop Start support for both FXS and FXO.

Ethernet is found increasingly today in homes, offices, schools libraries as well as in carrier's transport networks. Among the last vestiges where Ethernet remains absent is in the access network that connects the service provider's network with the subscriber. Zhone's comprehensive EtherXtend Ethernet solutions enable carriers to reach virtually any customer location and allow rapid provisioning of native Ethernet services ranging from megabits to gigabits.

"With the rapid proliferation of bandwidth-hungry Ethernet applications, service providers are looking for elegant ways of delivering high bandwidth Ethernet services that their subscribers demand," said David Markowitz, vice president of marketing for Zhone. "Zhone's EtherXtend products allow service providers the flexibility to deliver Ethernet everywhere over both copper and fiber."

Zhone's EtherXtend products are EFM standards compliant to deliver point-to-point Ethernet connectivity over the WAN. EtherXtend transports Ethernet directly over copper or fiber making it easy for subscribers to interconnect LANs over virtually any distance. These transparent LAN services allow businesses with broadly distributed remote offices to operate as if located on the same local network. By providing the broadest range of bandwidth requirements, service providers can offer a wide array of revenue generating bandwidth-intensive services and applications that their customers demand.

About Zhone Technologies, Inc. (www.zhone.com)

Zhone Technologies is a worldwide leading supplier of communications network equipment for telephone companies and cable operators. Zhone is enabling enhanced services by allowing network operators to offer broadband services over their existing networks today while simultaneously retooling for packet-based VoIP and IPTV over both copper and fiber access lines.

By utilizing Ethernet and IP technology, Zhone's products simplify network operations by consolidating multiple services onto a single access line. This convergence of services and networks simplifies provisioning and operations, delivers quality and reliability, and opens the door for delivering exciting new services.

Zhone pioneered this new category of products now commonly referred to as Broadband Loop Carriers (BLCs) which are regarded among the fastest growing segments of the multi-billion dollar DSL market. According to industry analysts, Zhone is first in broadband loop carrier market share. Zhone is also first in Ethernet over bonded copper market share and Zhone's products were awarded top ranking among BLCs.

With corporate headquarters in Oakland, California, Zhone operates development centers across North America and has sales and service facilities and customers spanning the globe. With deployments at over 600 carriers including some of the world's largest networks, Zhone has enabled carriers to reinvent their businesses.

Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change without notice. Copyright (C) 2006 Zhone Technologies, Inc. All rights reserved.