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Zhone Technologies Signs Cablenet for Cyprus Rollout of ADSL2+ Service

New MALC deployment designed to expand triple play offering outside of existing footprint

Oakland, CA — November 2, 2010 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global pioneer in FTTx network access solutions, announced today that telecommunication and entertainment services provider Cablenet Communication Systems LTD has chosen its MALC access solution for a nationwide Asymmetric Digital Subscriber Line (ADSL) 2+ network expansion in Cyprus. Cablenet is striving to deliver triple play services to consumers and businesses outside of its existing cable footprint and the combination of Zhone's technology expertise and B.A.S.E Technologies' optimization capabilities has proven to be the right solution for the goal.

"After an exhaustive selection process, we recognized that the dual support of Zhone's MALC platform and B.A.S.E. Technologies' integration team will best address our network requirements today in terms of technology, reliability and availability," said Nicolas Shiacolas, managing director, Cablenet Communication Systems LTD. "We have also gained the ability to scale our network as appropriate to meet future subscriber demands and service requirements."

Already the operator has unbundled more than 25 exchanges with Zhone's MALC multiservice access platform. The service uses combo ADSL2+ / Plain Old Telephone Service (POTS) cards to deliver high-speed internet and lifeline POTS. Zhone's Ethernet over copper solution is also being used to connect enterprise networks with 3024 EtherXtend Customer Premise Equipment (CPE) in the first mile.

Moving forward, the new infrastructure solutions and support services from Zhone and B.A.S.E. respectively will deliver full triple play services to Cablenet's subscribers across all of Cyprus and serve as the first step for Cablenet's planned transition to GPON. As a privately-owned company that offers telecommunication and entertainment services for the retail market and provides a full range of telecommunication services for the corporate market, Cablenet is poised for significant growth in the coming years.

"We have long enjoyed a market leadership position in EMEA for our access solutions and Cablenet's deployment in Cyprus only strengthens Zhone's reach and impact in the region," said Brian Caskey, chief marketing officer, Zhone. "This network expansion and technology upgrade aligns perfectly with Cablenet's long-term service roadmap and, as their trusted partner, we will work closely together to ensure a smooth and efficient migration to GPON when they are ready."

Zhone's MALC is a multi-service access platform optimized for delivering voice, data, and video services over a pure packet access network. MALC gives carriers like Cablenet the flexibility to cost-effectively deliver triple play services over existing facilities and migrate these services to a pure packet network. This migration is accomplished without disrupting subscriber service or revenue streams, giving carriers the ultimate flexibility for optimizing their networks and serving their subscribers.

For more information about Zhone's MALC solution, please visit http://www.zhone.com/products/MALC/.

About Zhone Technologies

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in all IP multi-service access solutions, serving more than 750 of the world's most innovative network operators.

The IP Zhone is the only solution that enables service providers to build the network of the future…today, supporting end-to-end Voice, Data, Entertainment Social Media, Business, Mobile Backhaul and Mobility service.

Zhone is committed to building the fastest and highest quality All IP Multi-Service solution for its customers.

Zhone is headquartered in California and its products are manufactured in the USA in a facility that is emission, waste-water and CFC free.

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