Press Releases

Zhone Technologies Acquires NEC eLuminant Leading Supplier of Last-Mile Technology Equipment Completes its Eighth Acquisition

OAKLAND, Calif. (February 18, 2003) -Zhone Technologies, Inc., the first company dedicated to total-delivery access equipment solutions for voice, data, and content service providers worldwide today announced that it has acquired NEC Eluminant Technologies, Inc. (eLUMINANT), a subsidiary of NEC USA, Inc., a recognized leader in access products offering proven Multiplexers, Digital Loop Carriers, SONET and Broadband Access Products.

Product lines to be acquired include eLUMINANT's portfolio of market leading access products:

   • ISC-303: Digital Loop Carrier
   • VISTA: Access Sonet ADM
   • FD-6: Fiber Access Multiplexer
   • RC-28D & RC-28e: M13 Multiplexers

The acquisition of eLUMINANT expands Zhone's substantial customer base with the addition of some of the world's largest carriers while at the same time bringing Zhone's current customers advanced new transport offerings which provide a bridge between existing copper-based loops and fiber optics. eLUMINANT's product portfolio has immediate application at both existing accounts as well as in greenfield carrier deployments by providing the ability to combine voice and data services, broadband access, and transport protocols over their existing MDU, DLC or CO-based infrastructure.

David Montanaro, chairman and CEO of eLUMINANT, said, "We are pleased that Zhone has chosen to include eLUMINANT in its family of telecommunications infrastructure products for the access network. With this transaction, our customers benefit not only from Zhone's reputable service and continuing support of the traditional eLUMINANT products, but also from the availability of a more comprehensive product portfolio addressing a broad range of access solution requirements."

"Zhone's acquisition of eLUMINANT further expands what was already the broadest and most scalable portfolio of access products in the marketplace today," said David Misunas, vice president of Access Products for Zhone. "Expansion through both acquisition and internal development not only expands our market share but also enhances the value of Zhone's product portfolio to our existing customers".

As Zhone's eighth acquisition, eLUMINANT further extends Zhone's portfolio of last-mile products allowing for more efficient, manageable and cost-effective delivery and support of narrowband and broadband access and services. Zhone's Single Line Multi-Service (SLMS™) architecture provides a blueprint for carriers to consolidate copper, fiber, and coaxial physical loop plants into a single integrated infrastructure supporting multiple transport options and multiple services with a common management model. The financial terms of the deal were not disclosed.

About NEC USA

NEC USA, Inc., a subsidiary of high technology giant NEC Corporation (NASDAQ: NIPNY), oversees NEC's commercial and R&D enterprises in North America. NEC USA subsidiaries include NEC America, NEC Solutions (America), NEC Eluminant Technologies, NEC FiberOptech, NEC Financial Services and NEC Laboratories America. Serving businesses and people with innovative technology for more than 100 years, NEC Corporation is a Global Fortune 500 company, a patent- producing leader worldwide, and a major provider of broadband and wireless networks and IT products, services and solutions. For more information about NEC USA and its operations, visit the company Web site at www.necus.com.

About NEC Eluminant Technologies, Inc. (eLUMINANT)

eLUMINANT's mission is to remove broadband access bottlenecks. The company accomplishes this by supporting and enhancing its current product line of digital loop carriers, multiplexers and other access products while introducing advanced new offerings such as the new RC-28e M13 multiplexer, the VISTA®, which provides a bridge between existing copper-based loops and fiber optics.

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