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Zhone Announces SLMS Access Operating System Release 1.14

Multi-service access leader enhances networking, QoS, voice interop, and security features across complete portfolio

Oakland, CA — September 17, 2008 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in multi-service access solutions, today announced the latest major release of the common software base for the company's platforms.

Zhone's SLMS (Single Line Multi-Service) access operating system provides intelligent MSAP, FTTx, and EFM functionality on the company's multiple hardware products, offering advanced capabilities, consistent operational interfaces, and unmatched performance across a wide range of form factors and service definitions. By leveraging SLMS throughout their networks, operators secure greater competitive advantage through more rapid deployment of new service differentiation as well as reduced costs of operation, training, sparing, and back office management.

The product of nine years of continuous development, incorporating innovations driven by collaboration with hundreds of service providers in more than 70 countries, Zhone's latest SLMS release adds functionality critical to today's access networks in a number of areas, including:

• Advanced Networking - ADSL2+ bonding, Broadcom's PhyR noise protection, LACP (link aggregation control protocol), RSTP (rapid spanning tree protocol), and enhanced two-wire metallic testing
  
• Quality of Service - Three-color policing , rate shaping per service, and IP SLA metrics
  
• Voice - Enhanced interop with 10 of the industry's leading softswitches, via industry-standard SIP, H.248, and MGCP protocols; support for Nortel's P-Phone interface for EBS phones; and expanded international voice features
  
• Security - Dynamic IP filtering, RADIUS authentication, and management layer support for SSH (secure shell) and SFTP (SSH file transfer protocol)
  
• Management - Enhancements to the web user interface, simplifying management of increasingly complex access networks
  

"Zhone's integrated service platform and operating system helped us expand our operation four-fold while cutting costs in half," said Jawaid Bazyar, president and CEO of foreThought.net, a fast-growth operator serving Denver and Colorado Springs. "This means we're able to provide our customers top-of-the-line service while maintaining one of the most competitive rates in the industry."

"Operators are clearly moving toward more sophisticated management of different classes of service, while continuing to work to reduce operational costs," added Vince Vittore, Program Manager for Enabling Technologies at Yankee Group. "We believe there is a lot of both top- and bottom-line value for operators in an approach that enables enhanced services and control in a single, consistent framework across the entire access network."

"The wealth of additional functionality we're delivering with this release has been driven directly by our customers," noted Steven Glapa, Zhone's VP of product management and marketing. "As service provider competition continues to intensify worldwide, we're seeing tremendous demand for access network enhancements that can create greater service differentiation while supporting higher quality of subscriber experience in demanding applications such as HD video."

For more information on how the new features in SLMS release 1.14 translate into higher network and service performance, visit http://www.zhone.com/slms.

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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