Primus Telecommunications Canada Selects Zhone and Tekelec for New Service Delivery; Interoperable Products Deliver Cost-Effective Solution for Canada's Largest Pure-Packet Voice and Data Service Provider

Business Wire, June 27, 2006

OAKLAND, Calif. & MORRISVILLE, N.C. -- Zhone Technologies, Inc. (NASDAQ:ZHNE), the first company dedicated to building total-delivery solutions for voice, data and content services worldwide, and Tekelec (NASDAQ:TKLC), a leading developer of high-performance network applications for next-generation fixed, mobile and packet networks, announced today that Primus Telecommunications Canada (Primus Canada) is deploying the companies' joint solutions. Primus, the largest alternative communications company in Canada, has selected and deployed Zhone's Multi-Access Line Concentrator (MALC(TM)), the Tekelec 6000 VoIP (voice over Internet protocol) Application Server and Tekelec 9000 Distributed Switching Solution (Tekelec 9000) for its DSL and local telephone service offering.

Primus Canada's residential local voice offering provides subscribers with full-featured VoIP services on what appears to the subscriber as a traditional local phone service. An elegant web portal extends subscribers advanced call features to include find-me/follow-me, call forwarding, personalized call treatments by caller and individualized hold music all over their existing telephones.

Because these advanced voice and data services are being delivered over the incumbent carrier's fixed copper loops, lifeline 911 emergency services remain fully supported and uncompromised. The services are being offered today in many urban areas across Canada, already reaching a market of approximately 3 million Canadian households.

As part of the offering, subscribers may select from a choice of broadband speeds up to 22 megabits per second. The solution allows subscribers to transform their existing local telephone service to include high-speed Internet service over the same telephone line simply, reliably and securely -- thereby reducing costs. Primus also offers a choice of long-distance services, including the very popular unlimited plans. Completing the triple-play bundle with the addition of IP video capabilities is under development and was a key consideration in Primus' vendor selection.

"We at Primus are committed to being the leader in delivering innovation," said Matt Stein, vice president, new technology and services at Primus Canada. "By providing the fastest download speeds in the country along with competitively priced bundles, innovative applications and a rapidly expanding footprint, Primus is reaffirming its position as a true industry innovator. This new threshold of Internet access speed, advanced features and savings provides a dramatically improved user-experience for our customers."

Primus Canada is providing these services to subscribers using Zhone's MALC. Zhone's 48-port Flexband line card allows both POTS voice and DSL data service to be delivered over a single line. MALC allows Primus to deliver carrier class line-powered voice services to their subscribers over existing telephone lines without the need for new equipment in the subscriber's home.

MALC supports integrated gigabit Ethernet and Resilient Packet Ring (RPR) technology to efficiently and cost-effectively handle both analog voice and digital packet traffic including multicast and broadcast video.

The Tekelec 6000 provides a migration to consumer broadband, mobility, IP Centrex and hosted PBX service delivery for service providers and their IP telephony customers. The Tekelec 6000 telephony application server is an integrated, scalable, standards-based solution that delivers revenue-generating applications out of the box, works with a wide range of network equipment and protocols and offers ease of administration while reliably supporting an almost unlimited number of customers with their own secure configurations.

An ideal cap-and-grow solution, the Tekelec 9000 enables a smooth migration from traditional circuit-based networks to next-generation packet-based technology. Built to natively switch packet, TDM (time division multiplexing) and ATM (asynchronous transfer mode) traffic, the carrier-grade, distributed softswitch provides an extremely cost-effective alternative for both TDM-only and packet/TDM applications. Any service can be switched to any other service using a single gateway, and the Tekelec 9000 delivers density and growth unmatched in the market today.

Zhone and Tekelec announced a global joint marketing agreement in 2005 to offer carriers a complete and integrated access/switching solution for delivering reliable, revenue-generating voice and data services.

"The relationship with Zhone extends the benefits of Tekelec's switching portfolio both in North America and beyond," said Jay Whitehurst, president and general manager of the Tekelec Switching Solutions Group. "The combined solution delivers uncompromising reliability and scale that is not matched with any other solution set on the market today. Zhone will bolster Tekelec's strategy to grow our market leadership in next-generation networks globally and across Tekelec's entire switching product portfolio."

David Markowitz, vice president of marketing for Zhone, said, "Zhone's MALC, the Tekelec 6000 VoIP Application Server and the Tekelec 9000 provide a smooth migration to packet networks. The combined solution allows carriers to deploy services today using TDM circuit technology and to migrate entirely to IP packet access and transport as their needs and networks dictate -- without incremental hardware."