ZyXEL Won Chunghwa Telecom's VDSL Equipment Tender for 234-thousand Lines

ZyXEL will provide VDSL switches, Ethernet switches and VDSL CPE for Chunghwa Telecom to deploy Taiwan's island-wide broadband network

Hsinchu, October 18, 2005 --ZyXEL Communications (TSE: 2391), world's leading broadband access solutions provider, today announces its success in the VDSL and Ethernet switch equipment tender from Chunghwa Telecom (CHT), Taiwan's largest telecommunication operator, on October 14th. According to the contract, ZyXEL will provide CO (Central Office) and CPE (Customer Premises Equipment) devices including VDSL switches, Ethernet switches and VDSL modems for CHT to construct Taiwan's island-wide broadband network providing broadband Internet connections, high-speed leased lines and online media services.

"Winning three-in-a-row in CHT's major CO equipment tenders is the top acclaim to our technological and competitive advantages in the CO arena," said Dr. Yuh-Long Chen, ZyXEL's President. "This VDSL equipment contract is one of the world's largest open tenders of its kind. With years of experience in VDSL technology and product development, ZyXEL was able to surpass others with outstanding specs and quality. As Triple Play service becomes commonplace all over the world, most major telecom operators are planning for upgrades to the new generation access network infrastructure. I believe that CHT, as a successful reference site in Taiwan, will give us a boost in expanding our CO business to countries demanding most advanced broadband solutions."

The equipment CHT acquires in this contract will become the backbone of the new-generation FTTx infrastructure throughout the island. In conjunction with earlier ADSL2+ IP DSLAM and CPE tender in June, and the Fiber Metro Area Network (MAN) tender in September, CHT's latest VDSL equipment deployment will form an integrated broadband service platform, enabling Triple-Play services such as high-speed Internet connectivity, MOD, VoIP and VPN services.

In order to provide cutting-edge MOD media service, CHT raises the equipment specification and standard bar significantly. In addition to outstanding data throughput, CHT also requires IP multicasting, QoS, VLAN, network security and system stability to meet the highest telco environment standards. ZyXEL's equipment underwent months of spec review and strict benchmark testing conducted by CHT, and finally became the winner of the contract.

About ZyXEL Communications
ZyXEL Communications Corp. (TSE: 2391), located in Hsinchu, Taiwan, is the world's largest DSL router provider (Gartner Group, August 2005). ZyXEL's broad line of Internet Protocol-based (IP) networking solutions includes access multiplexors, customer premise equipment, Internet security and Wireless LAN equipment, enabling high-performance network services for SOHO, small to mid-sized businesses and service providers. ZyXEL works closely with worldwide network equipment vendors, telecommunications companies, ISPs, and other major businesses. For more information, visit the company's Website at http://www.zyxel.com