ANDINATEL S.A., Selects Zhone's Single Line Multi-Service Architecture.

Business Editors/High-Tech Writers

OAKLAND, Calif.--(BUSINESS WIRE)--Jan. 7, 2003

National carrier delivers narrowband and broadband subscriber

services over a single standards-based uplink to both packet and

circuit environments

Zhone Technologies today announced that ANDINANET, the ISP business unit of Ecuadorian Telecommunications Service Provider ANDINATEL S.A. has selected Zhone's innovative Single Line Multi-Service (SLMS(TM)) architecture, to support the company's comprehensive multi-service DSL end-to-end solution in Ecuador.

The implementation will use Zhone's Broadband Access Node (BAN(TM)) next-generation services delivery platform in conjunction with Zhone's innovative Multi-Access Line Concentrator (MALC(TM)) platform, to deliver high-speed internet services over the company's core ATM network. This newly deployed architecture allows ANDINANET to simultaneously offer high-speed data as well as the traditional POTS services over ANDINATEL's existing local loop.

The entire network will be managed with Zhone's ZMS(TM) Management System for comprehensive lights-out service provisioning by combining network, element and service management in a common interface. In addition to operational cost benefits, SLMS provides ANDINANET with ample backplane capacity for both current and future service delivery, line and trunk flexibility, OSS Integration, and industry-leading density and price.

"ANDINANET's selection of Zhone's SLMS architecture is further evidence of the need for a manageable, scalable, cost-effective broadband access solution," said Jorge Rivadulla, Regional Sales Director for Zhone in Latin America. "This deployment further demonstrates global market acceptance for SLMS and Zhone's worldwide dedication to the next-generation local-loop infrastructure. No other company can make that claim."

"Zhone's MALC and BAN solution provides ANDINANET with the right technology by allowing us to capitalize on the emerging DSL market in Ecuador. We can now quickly and effectively fulfill the growing needs of our customers," said Mr. Pablo Paez, Technology Vice-President of ANDINATEL. "We selected Zhone's SLMS architecture because it offers carriers a whole new level of technical flexibility and operational efficiency when deploying DSL services," added Mr. Paez.

Zhone's SLMS architecture is the industry's first next-generation, local-loop network developed to deliver both narrowband and broadband service while reducing the cost of network operations. Designed for outside cabinet deployments, MDU's and CO's, SLMS extends multi-service networking across the local loop/last mile -- combining traditional voice, voice-over-packet and broadband data in a carrier class access platform. Zhone's products are currently deployed at over 250 carriers on five continents.

About ANDINATEL S.A.

ANDINATEL, S.A. is the National and International integrated telecommunications service provider in Ecuador. The Company offers local, long distance and international telephony, as well as broadband data, transmission services, video and internet broadband access services. ANDINATEL is the ILEC (Incumbent Local Exchange Carrier) for Quito city and 12 provinces of the Central, Northern and Eastern regions of Ecuador. For more information about ANDINATEL, please visit www.andinatel.com or www.andinanet.net

About Zhone Technologies, Inc. (Zhone)

Zhone's strategy combines existing solutions with Zhone's internally developed intellectual property to create a portfolio of scalable next-generation network products supporting a rich array of voice, data, video, and entertainment services. The company was founded by the senior management team that grew telecommunications pioneer Ascend Communications, Inc., from its startup roots to the multi-billion-dollar company acquired by Lucent Technologies (NYSE:LU) in September 1999. Zhone's advanced networking solutions include the Single Line Multi-Service architecture (SLMS(TM)), FlexBand(TM) Multi-service access port, Zhone Management System (ZMS(TM)), Broadband Access Node (BAN(TM)), Multi-Access Line Concentrator (MALC), AccessNode(TM) and Universal Edge(TM) 9000 DLC products (purchased from Nortel Networks - NYSE/TSE:NT), Sechtor(TM) voice gateways and Z-Edge(TM) access products.

Zhone, the Zhone logo, and all Zhone product names are trademarks of Zhone Technologies, Inc. Nortel Networks is a trademark of Nortel Networks. Other brand and product names are trademarks of their respective holders. For more information about Zhone and its products, please visit the Zhone Web site at www.Zhone.com or e-mail [e-mail] Specifications, products, and/or product names are all subject to change without notice.