Consolidated Communications Announces ''Telco TV'' Service Using Zhone's Multi-Access Line Concentrator.

OAKLAND, Calif. -- Zhone's Single-Line Multi-Service Architecture Enables Triple-Play Service Offering over Broadband Network

Zhone Technologies, Inc. (Nasdaq:ZHNE), the first company dedicated to building total-delivery solutions for voice, data and video content services worldwide, announced today that Consolidated Communications Inc., (Consolidated), the 15th largest telephone company in the U.S. and the largest independent telephone operator based in Illinois, has selected Zhone's Single Line Multi-Service (SLMS) architecture products for delivery of bundled voice, data and video services for its recently announced Digital Video Service (DVS).

With this new service, Consolidated's subscribers will be able to access over 200 all digital, crystal-clear channels including local programming, news and weather. In addition, Consolidated is offering over 400 hours of Movies on Demand per month including Pay Per View movies, sports events and concerts and 45 CD quality music channels. As part of the new service, subscribers can watch TV, surf the Internet & talk on the phone simultaneously using an interactive, on-screen program guide. Tailored programming can be created to block specific programming with parental controls.

Consolidated, one of the largest telephone companies in the U.S. to offer digital TV, will deliver a triple play bundle of voice, video and data services to customers in central Illinois. Based in Mattoon, Illinois, Consolidated Communications, Inc. is a family of companies managing more than 250,000 customer access lines throughout Illinois and Texas.

To deliver this innovative Digital Video Services package, Consolidated has selected Zhone's Multi-Access Line Concentrator (MALC(TM)) packet loop carrier.

As the industry's first next-generation, high-density multi-access line concentrator, the MALC has been specifically designed to support both traditional narrowband voice and broadband voice, data and video services in a single platform, capable of delivering these bundled services to any subscriber over a single copper or fiber access line. Zhone's MALC allows carriers to deploy using today's TDM circuit technology while simultaneously enabling video, data and VoIP services with an elegant migration to a converged pure packet system -- all without incremental hardware.

The MALC product family offers flexibility with a broad range of configuration options while maintaining common management, integrated cross-connect, integrated loop qualification with internal splitters, and flow-through provisioning capabilities to clearly differentiate the platform from traditional NGDLC platforms.

"As a company that's been in business for over 100 years, we realize the importance of basing all of our services on high-performance, highly reliable service platforms," said Tom White, Director Network Engineering for Consolidated. "Before introducing broadcast TV service for the first time, we looked hard at our choices for video technology; and after extensive evaluation of alternatives, we chose Zhone's Single Line Multi-Service architecture as the key element for our broadband and digital TV service delivery. The Zhone access architecture provides us with a proven carrier-class platform with flexibility for pure packet converged service delivery."

"Zhone's triple play voice/data/video products uniquely allow carriers to deliver the diversity of services required to compete while reducing deployment and operations costs," said Michael Fischer, vice president of U.S. sales for Zhone.

About Consolidated Communications

Founded in 1894, Consolidated Communications, Inc. provides communications services to both business and residential customers including local and long distance, Internet, business systems, retail and wholesale operator services, public services and fully integrated telemarketing and fulfillment services. For more information on Consolidated Communications, visit www.consolidated.com.

About Zhone Technologies, Inc. (Zhone)

Zhone (Nasdaq:ZHNE) 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) ATM/IP DSLAMs, FiberSLAM(TM) Optical Line Terminal, Zhone Residential Gateways (ZRG(TM)), GigaMux(TM) Optical Transport Systems and Zhone Management System (ZMS(TM)). With over one million subscriber interfaces shipped and deployments at over 300 carriers including among some of the world's largest networks, Zhone has enabled network operators to reinvent their businesses.

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 (C) 2005 Zhone Technologies, Inc. All rights reserved.

For more information, please visit www.zhone.com.