ZyXEL and Alcatel Team up to Win Chunghwa Telecom's Fiber Metro Area Network Equipment Contract

ZyXEL Will Provide Aggregator and Edge Switches to Taiwan??s Largest Telco for Fiber Metro Area Network Deployment

Hsinchu, September 26, 2005 --ZyXEL Communications (TSE: 2391), world's leading broadband access solutions provider, today announced that it had won a contract from Chunghua Telecom (CHT), Taiwan's largest telecommunication operator, for Fiber Metro Area Network (MAN) deployment on September 22nd. Joining forces with Alcatel, the two companies successfully won the largest contract of its kind in Taiwan; in which Alcatel will provide core switches in central sites while ZyXEL supplies aggregator and edge switches in remote sites, enabling CHT to construct a MAN covering northern, central and southern Taiwan regions.

"It's been an exciting encouragement to us," said Dr. Yuh-Long Chen, ZyXEL's President. "This is one of the world's largest MAN equipment contracts, and we are especially delighted by beating other renowned companies to become the first domestic company that CHT purchases Telco-class Ethernet switches from. In fact, ZyXEL has invested heavily in developing Telco-class Ethernet switches, and hoarded considerable experience in overseas procurement projects. We are confident with our capability to provide top-quality products and technology to CHT. The successful win of CHT contract has proved our development capabilities in Ethernet switches, as well as a stronger brand and more competitive advantage in global market."

The equipment CHT acquires in this contract will become the backbone of the new-generation MAN, and form an integrated broadband service platform in conjunction with VDSL Switch and CPE, as well as the latest ADSL2+ IP DSLAM and CPE, enabling CHT to effectively offer 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, network security and system stability to meet the highest telco environment standards. Along with Cisco, Nortel and Riverstone products, equipment from ZyXEL and Alcatel underwent months of spec review and strict benchmark testing conducted by CHT, and finally became the winning team of the MAN equipment contract.

About ZyXEL Pro Ethernet Switch
The ZyXEL Pro Ethernet Switch Series consists of three product lines to fit different corporate scales or requirements:
GS/ES-2000 Series: Layer 2 Ethernet switches with the best price/performance ratio
GS/ES-3000 Series: High-end Layer 2+ Ethernet switches for telco-class environments
GS/ES-4000 Series: Layer 3+ Ethernet switches for enterprise-class environments

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.