Press Release

Zhone Debuts Game-Changing Metro Wi-Fi Solution

Skyzhone Solves Capacity, Coverage and Cost Issues Impeding Metro Wi-Fi Deployments

Oakland, CA — June 10, 2008 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in multi-service access solutions, today introduced SkyZhone� the industry's first metro Wi-Fi system designed to cost effectively deliver high-capacity, high-reliability, multi-service networks.

Industry's first metro Wi-Fi solution to utilize 802.11n, all-MIMO antenna architecture, integrated DSL backhaul, and line powering.

Designed to address the challenges most directly affecting system operational costs and performance.

Provides capacity and reliability to deliver true, municipal and commercial, multi-service Wi-Fi networks.

(Note to Editors: Zhone will be featuring SkyZhone at NXTcomm in booth SU5611 See today's release title: Zhone's Metro Wi-Fi Approach Honored by NXTcomm EOS Awards for Technology Innovation)

SkyZhone revitalizes the viability of metro Wi-Fi networks by vastly increasing overall network capacity, coverage and reliability when compared to the traditional solutions used in many of the first outdoor Wi-Fi projects. The system also enhances the economics of metro Wi-Fi by giving network engineers the ability to leverage existing network backhaul facilities and greatly expand feasible locations for radio placement.

"As of the middle of last year, hundreds of municipalities worldwide had planned public Wi-Fi projects. However, network performance and reliability issues combined with the costs of building and managing ground-up networks have greatly hampered deployments." said Steven Glapa, Zhone's vice president of marketing and product management. "Zhone addressed these challenges head-on with SkyZhone, which, for the first time gives network operators the means to utilize Wi-Fi to deliver a truly capable and reliable multi-service network".

SkyZhone's innovative combination of standards-based features includes dual draft-802.11n radios powered by an all-MIMO antenna architecture. Available in both combined and standalone configurations of 2.4 GHz or 4.9 GHz, SkyZhone is designed to simultaneously serve both licensed public-safety and unlicensed general purpose applications. Additionally, SkyZhone features integrated DSL backhaul and integrated line powering of each radio.

These features come together with other unique attributes to provide significant benefits when compared to traditional solutions, including:

Support for true multi-service environments - SkyZhone provides a uniquely scalable solution to address the combined requirements of municipal, public-safety, and consumer needs.

Supports multimedia and bandwidth intensive applications - With up-to 22 Mbps of capacity per radio and low system latency -- video, voice, and gaming applications perform to user expectations.

Superior network coverage - SkyZhone's all-MIMO antenna design produces exceptional user device connectivity at distances up to 100% greater than solutions using "off-the-shelf" AP technology.

Removes the limitations of multi-hop mesh - SkyZhone's integrated DSL backhaul provides network planners the tools necessary to distribute capacity logically through the network, eliminating the "halving effect" and bandwidth contention issues common with multi-hop mesh systems.

Simplified network engineering - Place access radios where the users are. SkyZhone's integrated line powering allows network planners open consideration of mounting assets. If you can get a phone line to a location, you can power and provide service with SkyZhone.

Telco-grade reliability - Public safety applications demand reliability. SkyZhone has been engineered to provide telco-grade uptime and line powering facilitates ongoing operation even during extended AC power outages.

Integrated network operations - SkyZhone is fully integrated with Zhone's industry leading multi-service access platform and network management system, ZMS. Network operators can, for the first time, integrate Wi-Fi services into a larger, converged access network.

Improved service viability - By expanding revenue opportunities to include a wide range of municipal, public-safety, and commercial applications - SkyZhone remedies many of the most poignant challenges of metro Wi-Fi.

"Zhone's numerous new technology innovations can fundamentally expand the viability of metro Wi-Fi as a consistent mainstream access medium," said Ron Westfall, Research Director, Access and Applications, for Current Analysis. "SkyZhone gives service providers and municipalities a new tool to deliver on the promise of metro Wi-Fi by supplying the essential reliability, improved high-bandwidth performance and enhanced coverage needed to support and scale competitive metro Wi-Fi services."

ACD.net, Mid-Michigan's largest independent Phone and Internet Provider, selected SkyZhone to deploy networks in the cities of Lansing and Springfield, Michigan. In Lansing, the capital city of Michigan - SkyZhone's all-MIMO design enabled ACD.net to economically deploy a multi-use network serving public safety services using 4.9GHz and high-bandwidth consumer Wi-Fi for video, voice and data in the 2.4GHz band. In neighboring Springfield, ACD.net is utilizing the system to delivery Internet access at subsidized rates for residents in a 6 square mile portion of the city.

"Zhone has taken Wi-Fi to a new level of performance and capability," said Kevin Schoen, CEO of ACD.net. "SkyZhone opened up key new market opportunities in the public sector for us and renewed the viability of Wi-Fi as a multimedia consumer service."

SkyZhone is currently in trials or already deployed in more than 10 networks globally, supporting numerous applications including municipal public safety, video surveillance, consumer use broadband access, and campus/resort environments.

For more information, please visit http://www.zhone.com/skyzhone

Related Information

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

Contacts:

Zhone Investor Relations
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Fax: +1 510-777-7001
Email: investor-relations@zhone.com

Zhone Public Relations
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Email: aurora.arlet@edelman.com

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