Oakland, CA — March 3, 2009 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in multi-service access solutions, announced today that it has just passed the 5 million port milestone for cumulative shipments of its Single-Line Multi-Service (SLMS) based family of access network products. This achievement coincides with the latest major release of Zhone's SLMS access operating system, the common software base for all of the company's platforms.

The port shipment milestone reflects the breadth and depth of experience Zhone has gained in its role as the industry's multi-service access pioneer, over the 10 years since its founding in 1999. Supporting more than 700 operators in 70 countries today, Zhone-powered networks demonstrate unmatched scaling efficiency -- with cost-effective operation from as few as hundreds of lines for rural independent telephone companies to large-scale deployments over 1 million lines -- all while supporting the full spectrum of current and legacy access technologies.

Zhone's SLMS access operating system provides intelligent MSAP, FTTx, and EFM functionality on the company's multiple hardware products, offering advanced capabilities, consistent operational interfaces, and high performance across a wide range of form factors and service definitions, in networks built on copper, fiber, or wireless assets. 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.

Available now, the v1.15 SLMS release highlights Zhone's signature responsiveness to the needs of individual operators. All of the company's platforms now offer a new round of enhancements to efficiency, flexibility, security, and legacy interface support that have been driven directly by customers' interests, including:

IGMP snooping with proxy reporting -- enabling replication of broadcast video channels at the line card level, dramatically improving the efficiency of uplink bandwidth utilization in IPTV
T.38 fax relay support for SIP, H.248, and MGCP -- allowing service providers to support older fax machines that still persist, while moving their network to the modern VoIP architecture of their choice
CPE control through Zhone's ZMS element management system -- saving substantial operating costs by providing zero-touch remote management of customer premise devices through the powerful single interface of ZMS, and allowing full visibility to CPE for network operations teams and customer support through their own business systems, via the Zhone OSS Gateway
Access control lists -- supporting the networking industry's standard approach to detailed, granular control over subscriber access to network resources
Alternative DHCP server and DHCP Option 82 remote ID -- providing further implementation flexibility for operators

In assessing Zhone's milestone achievement, Jeff Heynen, directing analyst for broadband and video at Infonetics Research, remarked, "We believe Zhone is a leader among access vendors, with scale and sophistication of their products and organization well-suited to operators whose services and networks are growing rapidly in scope, and whose needs go further than a one-size-fits-all approach can support. Because of this architectural and application flexibility, we believe Zhone is very well positioned to take advantage of the US broadband stimulus programs."

"In contrast to the overall tenor of the times, we're excited about the trends we see in continued customer demand for new network capabilities, as telecommunications infrastructure improvements remain high on priority lists worldwide, whether prompted by government initiatives or fundamental customer demand and competition," added Steven Glapa, Zhone's VP of product management and marketing. "This SLMS release is an indication of the substantial, steady R&D investments we continue to make in order to seize new opportunities in growth segments like GPON and EFM."

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 only 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. Based in the United States, Zhone's manufacturing facilities are emission, waste-water and CFC free. www.zhone.com

Contacts:

Investors
Tel: +1 510-777-7013
Fax: +1 510-777-7001
Email: investor-relations@zhone.com Media
Tel : +1 510-777-7020
Fax : +1 510-777-7001
Email: public-relations@zhone.com

Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Other brand and product names are trademarks of their respective holders. Specifications, products, and/or product names are all subject to change without notice.

Zhone's Single Line Multi-Service architecture (SLMS™), allows carriers to concurrently deliver voice, new premium data and video services over copper or fiber access lines.