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Zhone Continues Strong Gains in Global BLC Market

Newest Research Shows Quarterly Data-Port Shipments More Than Double Over Other Suppliers

Oakland, CA — May 21, 2007 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global provider of advanced communications equipment and a leader in VoIP, IPTV, and Ethernet over both copper and fiber access lines, today announced first quarter results for 2007 from the research firm, broadbandtrends.com. Results show that Zhone continues its rolling four-quarter lead in Broadband Loop Carrier (BLC) DSL shipments worldwide. Zhone also ranked number one in first-quarter BLC - DSL port shipments with more than a 120 point lead over the number two supplier for last quarter. In the combined BLC voice and data port category, Zhone led the worldwide market by over 40 percent.

Teresa Mastrangelo, the author of the quarterly research report cited upgrade activity as the key market driver behind DSL gains. Other trends included Central America/Latin America (CALA) surpassing North America in quarterly DSL port shipments for the first time. Ms. Mastrangelo noted, due to unexpected seasonality, shipments in the Multi-Service Access Platform (MSAP) and BLC categories declined overall last quarter. However Zhone bucked this trend, showing healthy gains of more than 70 percent.

"Zhone's strength comes from a diverse and loyal customer base of more than 600 operators worldwide," said Mike Fischer, Zhone's vp of sales. "With Zhone's BLC, our customers can provide basic voice and data and roll-out next-generation services on demand. This has resulted in a first-to-market advantage in IPTV or VoIP markets for our customers."

In addition to high-speed data and POTs voice, Zhone's BLC enables rapid provisioning of premium Voice over IP and IPTV services via fiber or copper access lines. Zhone also provides the only BLC platform to support fast-growth Ethernet in the First Mile (EFM) services.

About Zhone Technologies, Inc.

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global provider of advanced communications equipment to more than 600 operators in both emerging and established markets. Zhone's market-leading Broadband Loop Carrier equipment enables operators to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to a cost-efficient, all-IP access network. The company's products address a broad range of applications including residential and business broadband, VoIP, IPTV, and Ethernet over both copper and fiber access lines. Zhone's advanced networking solutions include the Single Line Multi-Service architecture (SLMS™), Multi-Access Line Concentrator (MALC™), Raptor™ ATM/IP DSLAMs, Zhone Residential Gateways (ZRG™), GigaMux™ Optical Transport Systems and Zhone Management System (ZMS™). www.zhone.com

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