Zhone's MALC Selected by Birch Communications for IP Network Upgrade

Birch boosts network performance and cuts ownership costs through single platform provisioning of EFM, Voice, ADSL2+ and T1 Services

Oakland, CA — January 7, 2009 — Zhone Technologies, Inc. (NASDAQ: ZHNE), the global leader in single-platform delivery of voice, DSL, EFM, FTTx and wireless services, announced that Birch Communications has selected Zhone's MALC multi-service access platform (MSAP) to support the company's IP network upgrade extending from Dallas/Ft. Worth to north and central Texas. Headquartered in Atlanta, Birch Communications serves a 31 state region throughout the South and Midwest and ranks as one of the fastest-growth companies in Georgia.

Birch Communications' recent Texas deployment is one of a series of steps in the company's strategy to migrate to an all-packet network throughout its 31 state footprint. By delivering all of its access offerings, including EFM, ADSL2+, T1 and voice over Internet Protocol via one integrated platform, Birch can profitably deliver elite communications services while ensuring maximum value for its customers. With Zhone's MSAP, Birch saves in equipment overhead, power and field training while ensuring its customers industry-leading functionality over copper, fiber or Wi-Fi networks.

"There is a race to help carriers realize the inherent efficiency gains by migrating to IP networks and MSAP provisioning," said Steven Glapa, Zhone's VP of product management and marketing. "The Birch network strategy is a model for fast-growth service providers adapting to escalating demands for ultra high efficiency IP networks. By selecting Zhone's MSAP, Birch can provision higher profit, higher performance access services while cutting ownership costs by up to 50 percent."

"We selected Zhone because it is recognized as a premier, best-in-class IP equipment provider with over 700 operator deployments worldwide," said Tom Stachowiak, VP of Engineering for Birch Communications. "Our customers have extremely high expectations for Birch's reliability, and the capabilities of the Birch network and Zhone's equipment is operating flawlessly."

"Our new IP network upgrades allow us to provide more features, flexibility and savings to Texas businesses." said Chris Aversano, COO for Birch. "By utilizing secure, private IP technology, Birch is able to offer its customers unique bundled local voice and high speed internet services, including T1 services at very attractive price points."

About Birch Communications

Headquartered in Atlanta GA, Birch Communications is one of the largest competitive local exchange carriers in the 31-state Southeast, Southwest and Midwest regions serving small and medium business customers. Birch was the first in its class to deploy its own private IP network utilizing soft switch technology to deliver innovative, high quality, affordable voice and broadband communications services to small and medium business customers. Please visit www.birch.com for more information.

About Zhone Technologies -- Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in multi-service access network (MSAN) 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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