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Voljatel Selects Zhone's Broadband Loop Carrier and Optical Transport Products for Triple Play Service

Deployment Expands Zhone's Presence in Central Europe's Rapidly-Expanding Telecom Market

Oakland, CA - September 20, 2005 [Press Release]  — Zhone Technologies, Inc. (Nasdaq: ZHNE), the first company dedicated to building total-delivery solutions for voice, data and video content services worldwide, today announced that Voljatel Telekomunikacije (VoljaTel), a competitive carrier based in Slovenia, has selected Zhone's Multi-Access Line Carrier (MALC) & GigaMux 1600 Optical Transport products to offer consumers and small businesses an affordable alternative to traditional telephone services through Voice over Internet Protocol (VoIP).

Voljatel, the first commercial provider of IP telephony in the Slovenian market, is deploying the MALC to offer subscribers voice and data services including POTS, ISDN and ADSL2+. The GigaMux Optical transport products extend these capabilities with the addition of coexisting Gigabit Ethernet and SDH services. Voljatel's high-speed internet subscribers will enjoy broadband phone service that provides the same look and feel as classic telephony, with free unlimited local and long distance calling. Each plan includes the enhanced service features like call waiting, call forwarding and voicemail for one low, flat monthly rate.

"By leveraging Zhone's flagship Single-Line Multi-Service architecture we are able to offer customers throughout Slovenia full-featured, cost-effective calling plans," said Tom Cof, technical director, Voljatel. "Customers will receive a new telephone number from Voljatel's number block and will be able to manage their phone connection with a user-friendly interface on Voljatel's website. Comprehensive management tools, like IP Centrex, will also be made available to our businesses customers so they can enjoy simplified truncated dialling."

"Zhone continues to demonstrate leadership in targeted segments of the broadband market," said Mike Scheck, vice president of global sales at Zhone. "Achieving milestones like providing crucial infrastructure for Central Europe's rapidly-expanding telecom market, reinforces our expectations of continued strength for the company."

Zhone's combined access solutions are available in a range of chassis sizes and port counts supporting from 2880 ports in a single cabinet to 24 ports in a remote 1U DSLAM. Optional weather hardened outside plant enclosures and line powered capabilities allow service to be delivered across a carrier's entire serving area. Zhone has maintained a leading market position among the broadband loop carrier equipment vendors with ADSL2+. Zhone's early success in the fast growing Ethernet access over fiber and copper market is now also being validated with its GigaMux, Network Extender T1/E1 and SHDSL Ethernet Access Devices.

Zhone's MALC and Raptor products provide the highest density and lowest cost per port of any BLC or DSL platforms on the market, and are the only family of access products that offers software upgradeability to a fully functional voice and data NGDLC, with in-service software-selectable TDM, ATM or IP uplinks. Zhone's recently acquired 12000, 8800 and 4200 products extend the product portfolio with the broadest range of BLCs and DSLAMs of any vendor.

About Zhone Technologies

Zhone designs and manufactures network equipment for network operators worldwide. Zhone's products allow network operators to deliver a rich array of voice, data, video, and entertainment services over their existing networks while simultaneously retooling for converged packet-based voice (VoIP) and video (IPTV) over copper or fiber access lines. Zhone's advanced networking solutions include the Single Line Multi-Service architecture (SLMS(TM)), Multi-Access Line Concentrator (MALC(TM)), Raptor(TM) and GrandSLAM ATM/IP DSLAMs, Ethernet in the First Mile bonded solutions, Zhone Residential Gateways (ZRG(TM)), GigaMux(TM) Optical Transport Systems and Zhone Management System (ZMS(TM)). With deployments at over 400 carriers including among some of the world's largest networks, Zhone has enabled network operators to reinvent their businesses. For more information, please visit www.zhone.com.

Contacts:

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

Media
Jessica Mullens
Tel : +1 510-777-7020
Fax : +1 510-777-7001
Email: jmullens@zhone.com

For More Information on Voljatel:
VOLJATEL telekomunikacije d. d.
Šmartinska 106 , 1000 Ljubljana
www.voljatel.si
press@voljatel.si
tel: +386 1 6000 000

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. Copyright ©2005 Zhone Technologies, Inc. All rights reserved.

Copyright © 2005 Paradyne

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