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Zhone Recognized as Global Leader in Delivering DSL Access Services in Fast Growing BLC Market

Zhone Continues to Lead the Broadband Loop Carrier Market - Provisioning VoIP and IPTV Services Worldwide

Oakland, CA — March 27, 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 that global revenues for its Single-Line Multi-Service (SLMS™) access equipment increased over 75 percent in 2006. Zhone continues to lead the global Broadband Loop Carrier (BLC) market in real-world provisioning of VoIP and IPTV services and now ranks among the top three DSL equipment providers in North America.

A recent market share report published by Broadbandtrends.com underscored Zhone's top rank in the fast-growth DSL BLC market. "Zhone continues to hold a comfortable lead in rolling 4-quarter market share," said Teresa Mastrangelo, the report author who cited Zhone's market share as 45.7 percent worldwide. Mastrangelo reported that DSL port shipments in the BLC category rose 18 percent last year.

During 2006, Zhone shipped over one million ports of its MALC™ BLC platform. In addition to POTS, voice and high-speed DSL services, Zhone provides the only BLC platform to support Ethernet in the First Mile (EFM). Zhone's service provider customers deliver a rich suite of data, VoIP and IPTV media services to the home or enterprise via one integrated platform.

"Zhone gives service providers the most feature-rich access platforms on the market to address the realities of evolving networks and service demands," said Mike Scheck, Zhone's vp of worldwide sales. "Addressing a full range of services and interfaces with a single converged platform gives our carrier customers a powerful operational advantage."

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, GigaMux™ Optical Transport Systems and Zhone Management System (ZMS™). www.zhone.com

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