Telefonica Chooses ZyXEL as One of the Strategic Global ADSL CPE Suppliers

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March 13, 2002

Hsinchu, Taiwan, March 13, 2002 -- ZyXEL Communications Co. (TAI:2391.TW), the leading global broadband access solution provider, today announced that Telefonica S.A. (NYSE: TEF), one of the worldwide largest telecommunications operator for the Spanish and Hispano-talking world, has selected ZyXEL as one qualified strategic partner of ADSL global deployment. Based on the principal of global deployment, ZyXEL will soon start supplying to Spain, one of the strongest markets of Telefonica, and where its headquarters are located, in addition to Brazil and Peru where ZyXEL has been supplying since last year.

"It is very encouraging to be awarded with this certification. It does not just certify ZyXEL's know-how but also recognition to ZyXEL" said Dr. Shun-I Chu, President of ZyXEL Communications. "We look forward to further enhancing the partnership with Telefonica as both companies continue working together to fulfill the access requirements of worldwide customers."

About ZyXEL's Prestige 600 Series ADSL Bridge/Router
ZyXEL's Prestige 600 Series ADSL Bridge/Router is a feature-rich, value-priced access solution specifically designed to meet the unique requirements of small office/home office and residential users, enabling high-speed Internet connections at speeds of up to 8Mbps. ZyXEL's ADSL solution provides full-featured bridging/routing options, as well as highly automated setup and administration -- a key requirement for large-scale DSL service roll-outs.

About Telefonica
Telefonica is the leading telecommunications operator in the Spanish and Hispano-talking world. The company provides a wide range of services for an extensive group of activities: fixed telephony; mobile telephony; business services; the creation and distribution of internet content and services; the creation and distribution of audiovisual media content; sale and marketing of directories and guides; CRM services and e-commerce.

About ZyXEL Communications
ZyXEL Communications Co. (TAI:2391.TW), located in Hsinchu, Taiwan, is world's leading DSL CPE provider. Products developed by ZyXEL over the years are not only industry leaders, but consistently win acclaim and are selected by worldwide telecommunications companies, ISPs, and other major businesses. ZyXEL now serves Deutsche Telekom, EarthLink (NASDAQ: ELNK), France Telecom (NYSE:FTE), Sprint, Telefonica, Telenor, Verizon (NYSE: VZ) and many others. For more information on ZyXEL Communications, visit company's Website at http://www.zyxel.com.