Xpress Online Selects Zhone's Delivery Platforms for Voice and Data Services.

Business Editors/High-Tech Writers

OAKLAND, Calif.--(BUSINESS WIRE)--Jan. 6, 2004

Next-Generation Packet Digital Loop Carrier Allows Cost-Effective

Delivery of Voice and Data Services in Rural Markets

Zhone Technologies, Inc., (NASDAQ:ZHNE) the first company dedicated to developing the full spectrum of next-generation access infrastructure solutions, today announced that Xpress Online (Xpress), one of Sweden's first internet service providers, has selected Zhone's Raptor ATM/IP DSLAM and Zhone Management System (ZMS-LT) to offer voice and high-speed data services to subscribers at over 90 local exchanges across Sweden.

The Raptor Next-Generation DSLAM provides the highest density and lowest cost per port of any DSL platform on the market today. The Raptor is the only DSLAM capable of being upgraded to a full-featured DLC with support for POTS and legacy narrowband services. The Raptor dramatically lowers carrier's fixed and operational costs of service delivery over the existing local loop infrastructure while adding incremental revenue with new service creation.

Using Unbundled Local Loops, The Raptor is being deployed as part of Xpress's expansion into larger cities including Malmo, Gothenburg and Stockholm. After evaluating multiple solutions, Xpress weighed Raptor's price, density and versatility as determining factors in their decision. Xpress utilizes a pure IP backbone, and so the Raptor is configured in their network with IP uplinks and ADSL cards with splitter.

"Rapid, cost-effective delivery of highest quality services is the foundation for our business," said Wolfgang Wirtl, President of Xpress Online. "Raptor and ZMS-LT have reduced time and cost of service provisioning with rapid configuration and integrated splitters to eliminate cabling in the exchange."

The Raptor is a versatile platform that is available in a range of environmentally hardened shelf sizes including 7U, 3U and 1U that can be deployed in the CO, in Remote Terminals or in buildings allowing carriers to deliver DSL services regardless of line count. Raptor supports a wide variety of line interfaces and uplinks from 10/100baseT to DS1 IMA and OC-12. Raptor is the only DSLAM able to support either ATM or IP uplinks without additional hardware.

"Zhone delivers the greatest breadth of access solutions to meet the carrier market worldover," said Mike Scheck, VP of Major Carrier and International Sales for Zhone. "Raptor has proven a valuable addition to Zhone's access product portfolio by establishing a new benchmark in DSL pricing, density and flexibility. Zhone's product features and benefits are best evidenced by deployments on six continents."

Zhone products are installed at over 250 carriers and serve over 11 million subscribers worldwide.

About Xpress Online (Xpress)

Xpress On-Line IN is one of Sweden's first Internet Service Provider having launched its ISP activity in 1995 with 10 modems in its modem pool. Since its inception, Xpress has been a pioneer of the Internet. Our goal, now as then, is to provide superior Internet services for all. With over eight years of Internet experience our capacity and competence is capable of offering a range of services, from typical modem connections to advanced specialized solutions for companies of all sizes. From our extensive experience in providing Internet services, Xpress Online has learned that every customer has specific needs and demands for its Internet service. Our long history has endowed us with both capability and flexibility to provide a unique solution for every customer.

For more information about Xpress Online and its products, please visit the Xpress Online Web site at http://www.xpress.se

About Zhone Technologies, Inc. (Zhone)

Zhone Technologies, Inc. (NASDAQ:ZHNE) is the first company dedicated solely to delivering the full spectrum of next-generation local loop infrastructure equipment. 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 June 1999. Zhone's Multi Service architecture allows carriers to concurrently deliver voice, new premium data and video services over copper or fiber access lines. Zhone provides carriers with an elegant migration from legacy circuit-based technology to packet based networks while substantially reducing operating costs. With deployments at over 250 carriers including among some of the world's largest networks, Zhone has enabled carriers to reinvent their businesses.

Zhone's advanced networking solutions include the Zhone Management System (ZMS(TM)), Multi-Access Line Concentrator (MALC(TM)), FlexBand(TM) Multi-service port, Broadband Access Node (BAN(TM)) and Sechtor(TM) universal voice gateways, AccessNode(TM) and Universal Edge(TM) 9000 products (purchased from Nortel Networks - NYSE/TSE: NT), the Z-Edge(TM) access products, RAPTOR(TM) DSLAM, the Zhone Residential Gateway (ZRG) and the FiberJack(TM).

For more information about Zhone and its products, please visit the Zhone Web site at http://www.zhone.com or e-mail [e-mail]

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 2004 Zhone Technologies, Inc. All rights reserved.