Zhone Technologies Acquires Nortel Networks Access Networking Technology

Business Wire, August 28, 2001

Business Editors/High-Tech Writers

OAKLAND, Calif.--(BUSINESS WIRE)--Aug. 28, 2001

Establishes Customer Base, Market Share and

Technology Portfolio with the Addition of Nortel Networks'

AccessNode/Universal Edge 9000 Product Families

Zhone Technologies, Inc. today announced that it has acquired assets relating to the AccessNode(TM) and Universal Edge(TM) (UE) 9000 Digital Loop Carrier (DLC) shelf and UE 9000 Remote access shelf product families from Nortel Networks (NYSE/TSE:NT). This includes AccessNode ABM shelf, and AccessNode CDS shelf.

Built to accommodate a wide variety of loop technologies, AccessNode is a multi-fabric, high-density, integrated access platform designed to deliver a full suite of narrowband and broadband services including POTS, ISDN and Centrex as well as ADSL, G.Lite and VDSL. AccessNode and UE 9000 offer service providers an evolutionary platform, capable of utilizing existing TDM-based infrastructures while simultaneously supporting DSL and other data services. This versatility allows for seamless integration into central offices, remote terminal and stand-alone environments. As part of the agreement, Zhone not only acquires assets relating to Nortel Networks access products including AccessNode and UE 9000, but will also assume support for the existing AccessNode and AccessNode Express installed base.

Further, Zhone will be enhancing the AccessNode and UE 9000 platforms with new software and hardware features and providing customers with a migration path to a standards-based next generation converged platform like Zhone's Single-Line, Multi-Service (SLMS(TM)) network architecture which is available today.

"At Zhone we viewed the most important aspect of this acquisition to be the AccessNode UE 9000 DLC customers. With the acquisition completed, AccessNode UE 9000 DLC customers can be assured of both continued product support and future technological enhancements. In addition, by adding these products to our technology arsenal, Zhone immediately establishes a leadership position within the next generation digital loop carrier (NGDLC) market," said David Misunas, vice president and general manager for the access systems division of Zhone. "DLC's have become the epicenter of the access network and with this acquisition Zhone has penetration in major carriers accounts -- both domestic and abroad -- who have selected the AccessNode and UE 9000 as aggregation platforms. All in all, this acquisition of technology, engineering and service expertise, furthers our goal of becoming the number one equipment provider within the access arena."

Expanding Services and Applications

The AccessNode family allows carriers to cost-effectively extend bandwidth to curbside or remote terminal locations. By utilizing either the AccessNode or UE 9000 DLC, carriers may achieve substantial cost reductions associated with the capital build-out and operating overhead associated with deploying separate DLC's or DSLAM's.

AccessNode products provide support for both narrowband and broadband services in an integrated platform. Multicircuit line cards support narrowband interfaces including POTS, Universal Voice Grade (UVG) and Service Adaptive Access (SAA). Broadband services include Asymmetrical DSL (ADSL), DMT Full-rate, G.Lite, Symmetrical DSL (SDSL), and ISDN DSL (IDSL)-enabling providers to deploy various DSL services as market requirements and the needs of business and residential customers evolve.

"The NGDLC market is continuing its expansion as carriers refocus their DSL deployment from the central office to the outside plant," said Barry J. Moon, senior analyst, optical access for RHK, Inc. "Service providers are looking for products that can bridge the barrier between the existing narrowband services and developing broadband services. Based on RHK's June 2001 NGDLC forecast, the market for NGDLC products will be $3.3 billion in 2004," Moon said.

The AccessNode and UE 9000 products complement Zhone's existing technology portfolio enabling Zhone to offer carrier customers a choice of narrowband, integrated and converged technology platforms.

Zhone's SLMS network architecture, allows carriers to streamline the deployment of narrowband and broadband services, which include voice, high-speed data, video and content services.

As part of the Single Line Multi-Service architecture, Zhone's Broadband Access Node (BAN), Sechtor and Z-Edge products allow service providers to connect copper, fiber, and coaxial physical loop plants through a single integrated infrastructure. The Zhone Management System (ZMS(TM)) offers a single, consistent interface from which to diagnose, troubleshoot, provision, and bill across all services.

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, video, Internet, 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)), Zhone Management System (ZMS(TM)), Broadband Access Node (BAN(TM)), AccessNode(TM) and Universal Edge(TM) 9000 products (purchased from Nortel Networks (NYSE/TSE: NT), Sechtor(TM) universal voice gateway, and the Z-Edge(TM) access products.