Zhone Technologies Selects CTDI for Contract Manufacturing; Zhone Expands Capacity and International Distribution Capabilities Through Expanded Relationship With World-Class Manufacturing Firm

The CTDI Hungary plant, located in Budapest, is a 50,000square-foot manufacturing facility with capabilities that includesurface mount technology parts placement, electronic assembly andtesting. CTDI is ISO 9001 certified and its award-winning world-classtechnical staff and diverse suite of telecommunication services areable to support all aspects of manufacturing functions for some ofZhone's high run-rate products.

The Budapest facility enables Zhone to offshore its manufacturingof high volume products with an award-winning world classmanufacturer. As a result, Zhone achieves immediate cost benefits andZhone's growing international customer base enjoys accelerateddelivery intervals. Under terms of the agreement, CTDI's Hungaryfacility will be providing both manufacturing and warranty repairservices for some of Zhone's market-leading SLMS products.

"CTDI is a proven leader in contract manufacturing, logistics andrepair," said Ed Thompson, vice president of operations for Zhone."Our selection of CTDI as a supply chain partner allows Zhone tomaintain its quality commitment while improving our operationsoverhead."

"CTDI is pleased with the opportunity to expand its relationshipwith Zhone, a leading supplier in the telecommunications industry,"said Jerry Parsons, Chairman and CEO of CTDI. "We look forward toproviding Zhone with the quality manufacturing services that areessential to its success."

About CTDI

A premier Telecommunications service company headquartered in WestChester, Pennsylvania. CTDI has provided groundbreaking maintenanceand product service solutions to the global telecommunicationsindustry since 1975. Today, CTDI offers the most comprehensive ServicePortfolio in the industry that includes: Wireline Repair & Logistics,Wireless Repair & Logistics, Engineering and Installation services,Global Supply Chain solutions and Product Engineering & Manufacturing.Today, CTDI services Original Equipment Manufacturers (OEM) andCarriers from 37 international strategic repair and logisticslocations supported by an experienced team of over 3,500telecommunications professionals. CTDI feels we are the best in theindustry at what we do and has a company-wide commitment to achievingservice excellence.

About Zhone Technologies, Inc. (Zhone)

Zhone designs and manufactures network equipment for networkoperators worldwide. Zhone's products allow network operators todeliver a rich array of voice, data, video, and entertainment servicesover their existing networks while simultaneously retooling forconverged packet based voice (VoIP) and video (IPTV) over copper orfiber access lines.

Zhone's advanced networking solutions include the Single LineMulti-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 ManagementSystem (ZMS(TM)). With deployments at over 600 carriers includingamong some of the world's largest networks, Zhone has enabled networkoperators to reinvent their businesses. For more information, pleasevisit http://www.zhone.com.

Zhone, the Zhone logo, and all Zhone product names are trademarksof Zhone Technologies, Inc. Other brand and product names aretrademarks of their respective holders. Specifications, products,and/or product names are all subject to change without notice.Copyright (C) 2006 Zhone Technologies, Inc. All rights reserved.