Lucent Technology Taiwan and ZyXEL Communications Team upto Win 166,500 ADSL Line Tender from Chunghwa Telecom

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Partnership Integrates Lucent and ZyXEL's Leading ADSL Technology for Chunghwa Telecom's ADSL Infrastructure
March 27, 2000

Hsinchu, Taiwan, March 27, 2000 - ZyXEL Communications Co., an innovator and a leading provider of integrated high-speed DSL equipment, today announced that its partnership with Lucent Technology Taiwan has been awarded 3 contracts from Chunghwa Telecom, Taiwan's largest telecom system operator. By these contracts, ZyXEL will be Chunghwa's preferred ADSL CPE provider in their aggressive deployment of ADSL services in Taiwan, which includes the supply and installation of ZyXEL's Prestige 642 ADSL routers and modems.

To win Chunghwa Telecom's tender, which consisted of 4 contracts totaling 240,000 ADSL ports of access equipment purchasing throughout the island, Lucent Technology Taiwan and ZyXEL communications formed a strategic alliance earlier this year to provide complete ADSL CO-side DSLAM and CPE-side routers and modems. The two companies won three of the four tenders in northern and central Taiwan, which in terms of 166,500 ports of ADSL access equipment. Chunghwa Telecom's mass implementation of ADSL service in the nation will result in a great increase in ZyXEL's DSL market share as well as considerable revenue this year.

"The contract is a win-win situation for both companies," said Shin-Jou Fang, the President of ZyXEL Communications. "Lucent Technology will benefit from ZyXEL's economic and easy-to-use CPE solutions, which will bring this technology quickly to the mass marketplace. At the same time, Chunghwa Telecom gains perfect ADSL solution from Lucent and ZyXEL that fits in well with its aggressive investment of high-speed data delivery networks."

"We are pleased to partner with ZyXEL Communications to market our Stinger DSLAM as an extension of our highly successful carrier-class offerings," stated by Jason Chi, President of Lucent Technologies Taiwan. "The partnering of the two company's product capabilities combined with Chunghwa Telecom's leading position and reputation in Taiwan will make this coalition a complete success."

ZyXEL's Prestige 642 ADSL Router and Modem
ZyXEL's Prestige 642 ADSL router was amongst the industry's first bridge/router CPE devices that implemented PPPoE (RFC 2516). PPPoE preserves the existing dial-up networking infrastructure that users are already familiar with. For the ISPs/carriers, PPPoE requires no new infrastructure and allows the reuse of existing support facilities, e.g., RADIUS, which greatly speed the new broadband service deployment. The Prestige 642 router and modem are designed for small office/home office and residential users allowing high-speed Internet connections at speeds of up to 8Mbps. It is the most cost effective, easy-to-use broadband Internet access solution, an ideal product for users who require high-speed DSL access without the added complexity.

About Chunghwa Telecom Tender
The tender of Chunghwa Telecom's ADSL broadband access network equipment, included 2 contracts in north Taiwan and one in central and south part. The four areas have 240,000 ports of broadband transmission equipment (branch DSLAM, ATU-R, & the related network management equipment). The seven venders bidding the tender included Lucent Technology Taiwan Telecommunications (CPE provided by ZyXEL) , Alcatel Telecom Taiwan (Taisel), Southern Information System, Mecuries (adopt Nortel (NYSE/TSE: NT) equipment), Siemens Telecommunication System (adopt Nortel equipment), TECOM (adopt Nokia equipment, and CPE provided by Arescom) and Tainet Communication System.

About Lucent Technologies
Lucent Technologies (NYSE: LU), headquartered in Murray Hill, N.J., USA, designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems and microelectronic components. Bell Laboratories is the research and development arm for the company. For more information on Lucent Technologies, visit its Web site at http://www.lucent.com.

About ZyXEL Communications
ZyXEL Communications Co. (TAI:2391.TW), located in Hsinchu, Taiwan, is a leading supplier of complete networking access solutions for Internet/Intranet/VPN/Extranet applications. 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 France Telecom (NYSE:FTE), EarthLink/Mindspring (NASDAQ: ELNK), Bell Atlantic (NYSE: BEL), Verio (Nasdaq: VRIO), Telia, Telecom Italia (NYSE:TI), Czech Telecom, Chunghwa Telecom, China Telecom, Korea Telecom, and Cuba Telecom.

To speed widespread deployment of DSL, ZyXEL has engineered compatibility with central office equipment from Lucent (NYSE: LU), Alcatel (NYSE:ALA), Ericsson (NASDAQ:ERICY), Nokia (NYSE: NOK), Nortel Networks (NYSE/TSE: NT), PairGain (NASDAQ:. PAIR), Samsung, and Copper Mountain Networks (Nasdaq: CMTN) into its DSL product lines. For more information on ZyXEL Communications, visit company's Website at http://www.zyxel.com.