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Zhone’s zNIDs and MXK FTTx Platforms Selected by the City of Salisbury for Municipal Fiber Project

Salisbury Seeds Community Cohesion and Economic Growth through Advanced Communications Services

Oakland, CA — January 27, 2010 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in network access solutions, today announced The City of Salisbury in North Carolina has selected Zhone’s MXK and zNID Fiber to the Home (FTTH) solutions to serve as the bedrock platforms for a visionary municipal broadband initiative now underway. Salisbury officials cite interactive HDTV, telemedicine, advanced emergency services and greater community cohesion as potential differentiators in attracting knowledge workers and seeding new business growth in the shifting digital economy.

Leveraging fundamental design advancements in non-blocking architecture, Zhone’s MXK platform and zNID Optical Network Terminals (ONTs) are optimized to support unicast media streams that require vast amounts of dedicated bandwidth for applications like interactive HD video and telemedicine. For Salisbury, Zhone’s integrated approach to FTTH results in lowered equipment costs, increased network control, and targeted service differentiation on the full range of FTTx services.

“We don’t want to rely on the technology or timeline of existing carriers to meet our goals for a communications network that gives us a competitive advantage in attracting new businesses to our city,” said Mike Crowell, director of broadband services for Salisbury. “Zhone’s FTTx system proved to be the most powerful solution with twice the capacity over other platforms on the market. That nets out to significantly lowered bandwidth costs, while giving us the freedom to grow network services as we grow our city.”

Salisbury officials conducted an exhaustive feasibility study, including case studies, user satisfaction surveys and a thorough business case analysis before commencement of the project. Precedence showed a dramatic increase in service adoption when customers had the choice of municipally owned broadband service, surveyors said.

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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