Stratford Mutual Telephone Company Selects Zhone's FiberSLAM Fiber to

    Business Editors/High-Tech Editors

    OAKLAND, Calif.--(BUSINESS WIRE)--May 12, 2005--Zhone Technologies, Inc. (Nasdaq:ZHNE), the first company dedicated to building total-delivery solutions for voice, data and content services worldwide, announced today that Stratford Mutual Telephone Company, a leading independent telephone operator based in Iowa has selected Zhone's FiberSLAM(TM) Next-Generation Optical Line Terminal and Zhone's Residential Gateway ZRG 850 to deliver service throughout their serving area.
    As part of Zhone's Single Line Multi-Service (SLMS) architecture, FiberSLAM is the latest addition to Zhone's complete, end-to-end solution that allows telephone carriers to deliver the triple-play of voice, data and video services to their subscribers over a single network. SLMS has proven cost effective for carriers worldwide and encompasses any deployment scenario, whether greenfield networks, migration from old copper plant or an overlay.
    FiberSLAM enables new high bandwidth optical services to the home or business using Zhone's acclaimed Single-Line Multi-Service (SLMS) architecture. Designed for CO, RT, outdoor cabinet or basement deployment, the FiberSLAM delivers both traditional and next generation applications including legacy voice, high speed data and interactive analog or digital video.
    To complete the solution, Stratford has selected Zhone's innovative PON Residential Gateway to serve as the ONT/ONU for connections directly to residential subscribers. The Zhone Residential Gateway (ZRG) combines the functions of a modem, router and Integrated Access Device in a single unit that resides either indoors at the customer premises or outdoors at the subscriber demarc. From a single fiber input, the Zhone ZRG delivers POTS voice, fast Ethernet and either IP or RF video over the subscribers existing home wiring.
    "The Zhone solution utilizes existing TVs, peripherals and electronic devices," said Randy Baker, General Manager at Stratford. "By utilizing existing in-home coax, we eliminate costly home rewiring. The result is lower deployment costs while enhancing our subscriber's experience."
    Stratford will also be using Zhone's Management System (ZMS) -- a common flow-through provisioning and management platform that integrates into existing OSS systems. Zhone's ZMS management system has been OSMINE certified.

    About Stratford Mutual Telephone Company (Stratford)

    Stratford Mutual Telephone Company provides local telephone service for the 838 exchange under the 515 area code in central Iowa. In combination with its subsidiary, Complete Communication Services, Corp., Stratford offers business and residential local and long-distance voice service, cable television service to 7 area communities and Internet access in 4 area communities under the trade name of GlobalCCS.net.

    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, Zhone Residential Gateways (ZRG(TM)), GigaMux(TM) Optical Transport Systems and Zhone Management System (ZMS(TM)). With deployments at over 300 carriers including among some of the world's largest networks, Zhone has enabled network operators to reinvent their businesses. For more information, please visit http://www.zhone.com.

    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.

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CONTACT: Zhone Technologies, Inc. Siobhan McMullin, 510-777-7020 (Media) smcmullin@zhone.com Investor Relations, 510-777-7013 investor-relations@zhone.com

KEYWORD: CALIFORNIA IOWA INDUSTRY KEYWORD: HARDWARE TELECOMMUNICATIONS NETWORKING INTERNET E-COMMERCE PRODUCT SOURCE: Zhone Technologies, Inc.

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