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Zhone's MALC Selected by Cruztelco for Migration from Traditional TDM to Pure-IP Access Services

Cruz Cites Smooth Migration Path and MALC Support for Advanced Digital Media in Selection Criteria

Oakland, CA — December 2, 2008 — Zhone Technologies, Inc. (NASDAQ: ZHNE), the global leader in single-platform delivery of voice, DSL, EFM, FTTx and wireless services, announced that Philippines based service provider, Cruztelco has selected Zhone's MALC™ multi-service access platform (MSAP) to support the company's expansion to business and residential VoIP, and ADSL2+ services. In addition to a smooth migration path from traditional TDM to pure-packet access services, Cruztelco cited Zhone's advanced support for the full range of digital video offerings in its selection criteria.

Cruztelco has a star configuration network wherein all the systems in the provinces are connected to the hub or main network operation center in Manila. "The MALC allows us to save on the bandwidth going to the hub today by providing a direct interconnect to the TDM switches for local calling requirements," said Enrico De Los Reyes, vice president of operations for Cruztelco. "The MALC's any card/any slot design is ideally suited for our migration model and provides a fast and efficient path to state-of-the-art pure-play Internet facilities."

Cruztelco is currently rolling out Voice over IP and ADSL2+ to its residential and business customers with plans underway for digital video services as regional broadband penetration increases.

"While broadband penetration in the Philippines jumped 200 percent last year, it still reaches only five percent of the population," said Steven Glapa vice president of product management and marketing for Zhone. "Cruztelco has shown a deep commitment to making access services affordable, reliable and pervasive for its customers. The MALC provides Cruztelco a uniquely agile platform and a wide open growth path."

About Cruz Telephone Co. Inc. (Cruztelco)

Established in 1973, and headquartered in Taytay, Rizal Philippines, Cruztelco provides voice, high-speed data and wireless services to commercial and residential customers from Metro Manila and Luzon to the provinces of the Visayas and Mindanao.

About Zhone Technologies -- Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in multi-service access network solutions, serving more than 700 of the world's most innovative network operators. The company offers the industry's broadest fully-integrated portfolio of MSAP, FTTx, EFM and Wi-Fi access technologies, enabling a full suite of services, including residential and business broadband, VoIP, and High-Definition IPTV. Zhone's converged multi-service access platform helps operators rapidly deploy premium services using copper, fiber, and wireless while improving network agility and reducing costs. www.zhone.com

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