Press Release

Zhone's MXK Selected by Desktop for GPON Rollout in the State of Sao Paulo, Brazil

Desktop Cites Future-Proof Bandwidth Provisioning, Platform Resiliency and Faster ROI on Premium Network Services in Selection Criteria

Oakland, CA — January 26, 2010 — Zhone Technologies, Inc. (NASDAQ: ZHNE), a global leader in network access solutions, today announced that the Brazilian based service provider, Desktop selected Zhone's MXK multi-service access platforms (MSAPs) and zNID optical network terminals (ONTs) for its GPON expansion into Sao Paulo.

Desktop cited future-proof bandwidth capacity, lower total cost of ownership and robust platform design in its selection criteria. Desktop currently provides VoIP and data to the 8 cities of Sao Paulo State and plans to add premium GPON services, expanding into neighboring cities by mid 2010. Desktop's choice to deploy GPON is a direct response to customer demand for higher speed, premium services with flexible pricing. After evaluating the MXK, Desktop found they could maintain competitive service tiers while achieving faster return on investment (ROI) over lower capacity platforms.

"Zhone's MXK offers the bandwidth capacity and service agility to expand our network in a truly future-proof manner," said David Lindo, director of Desktop Internet Services. "End-to-end, Zhone's GPON system provides an advanced level of visibility and service control, which means flexibility for us and enhanced quality of experience for our customers."

"Desktop is highly attuned to the needs of the end customer with a consistent focus on delivering the most future-proof technology, while at the same time ensuring service flexibility and competitive pricing," said Brian Caskey, CMO for Zhone Technologies. "The MXK is designed expressly to meet operator requirements for agility and platform resiliency with plenty of capacity for growth and new service innovation."

About Desktop

Desktop is an Internet Service Provider based in Campinas, Brazil. Desktop offers advanced VoIP and high-speed residential and corporate data services throughout a number of cities in the state of Sao Paulo, Brazil. For more information about Desktop, visit http://www.desktop.com.br/

About Zhone Technologies -- Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in multi-service access solutions, serving more than 700 of the world's most innovative network operators. The company offers the industry's only fully-integrated portfolio of MSAP, FTTx, EFM and Wi-Fi access technologies resulting in improved network agility and reduced costs in delivering the full spectrum of access services, including residential and business broadband, VoIP, and High-Definition IPTV -- over copper, fiber, and wireless. Zhone is headquartered in California and its MSAP products are manufactured in the USA in a facility that is emission, waste-water and CFC free.

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