Zhone Technologies, Inc. : Zhone Technologies Surpasses Strategic Milestone of 3,000 MXK? Platform Deployments Worldwide

FTTx market continues growth domestically and internationally, spurs increased MXK deployments

Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in FTTx network access solutions, today announced the deployment of more than 3,000 MXK? multi-service access node (MSAN) platforms worldwide. Zhone embraces the growing demand for Gigabit Passive Optical Network (GPON), Active Ethernet (AE) and very high bit rate Digital Subscriber Line (VDSL2) connectivity and continues to equip its customers with products and solutions aimed at addressing their bandwidth concerns and shifting consumer expectations.

"According to our market assessment, Zhone is a steady top five FTTH network provider in all the markets they address," stated Teresa Mastrangelo, principal analyst at Broadbandtrends. "With recent updates to the Zhone FiberHome and Zhone FiberCell portfolios and the introduction of Zhone EZ FiberService, the company is poised for continued leadership in the global FTTx market with complementary presence in the mobile backhaul market. Zhone's continued focus on product development has enabled it to grow its presence both domestically and abroad. We expect demand for FTTx services to grow at a 14-16% CAGR over the next 3-5 years with continued strong growth expected in the U.S., Latin America and European markets where Zhone continues to focus its efforts."

According to USA Today, consumer demand for wireless broadband is anticipated to increase sixty-fold by 2015, and Zhone's subsequent, ongoing expansion of its customer base across the Middle East, Central and Latin America (CALA), Europe and North America is a result of the powerful combination of best-in-class solution design, continued innovation, technology leadership and global customer service capabilities. Zhone's leadership status in the global fiber-to-the-home (FTTH) market demonstrates the value that service providers place on the company's ability to consistently deliver high-quality, high-performance single line multi-service (SLMS)-based access solutions.

"The four-pronged offering of Zhone's MXK, zNID? GPON and AE Optical Network Terminals (ONTs), Zhone Management System (ZMS?) and Zhone EZ Touch Provisioning? system provides the customizable solutions that our customers expect, designed to expand network reach and service offerings," explained Brian Caskey, chief marketing officer at Zhone. "Each of our solution portfolios - the IP Zhone?, Zhone FiberHome? and Zhone FiberCell? - endow our customers to enhance the value of their own copper, fiber and Ethernet investments for the long-term and craft a cost-effective, scalable and future-proof network for their individual subscribers. The recent deployment with Mobily and continued expansion with Etisalat - along with other recent customer announcements - are further proof of the MXK's ability to address leading operator requirements for high performance, scalability, flexibility and overall system reliability."

Zhone FiberHome portfolio of products and solutions, including the MXK platform, fulfills the network requirements of both international and domestic customers' broadband expansion efforts for residential and business users and the growing opportunity in the mobile backhaul market provide ongoing opportunities for Zhone to further deploy the MXK platform globally.

To-date, Zhone has deployed more than 3,000 of its fully redundant, carrier-grade all-IP MXK platforms with more than 150 service providers globally, signaling an FTTx customer growth rate of more than 450 percent in the 3-year period from January 2009 to January 2012. Total subscriber capacity supported by these deployments now exceeds 20 million. Featuring industry-leading density, scalability and switching capacity, the MXK is the industry's first terabit access concentrator and provides non-blocking capacity of up to 3,600 100 Mbps GPON subscribers or 360 1G Active Ethernet subscribers. Zhone has also driven more than 8500 percent ONT growth and more than 9800 growth OLT growth since solution inception.

For more information about Zhone's MXK solution or to learn more about its various applications, including mobile backhaul, please visit the Zhone FiberHome? or Zhone FiberCell? portfolios on the Zhone website.

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.

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.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "target," "will," "would," variations of such words, and similar expressions are intended to identify forward-looking statements. In addition, forward-looking statements include, among others, statements that refer to financial estimates; projections of revenue, margins, expenses or other financial items. Readers are cautioned that actual results could differ materially from those expressed in or contemplated by the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, commercial acceptance of the Company's products; intense competition in the communications equipment market; the Company's ability to execute on its strategy and operating plans; and economic conditions specific to the communications, networking, internet and related industries. In addition, please refer to the risk factors contained in the Company's SEC filings available at www.sec.gov, including without limitation, the Company's annual report on Form 10-K for the year ended December 31, 2010 and the Company's quarterly report on Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements for any reason.

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