DZSI Company Profile

DASAN Zhone Solutions, Inc. (DZS, formerly known as Zhone Technologies, Inc.) was incorporated under the laws of the state of Delaware in June 1999. On September 9, 2016, we acquired Dasan Network Solutions, Inc. a California corporation (DNS) through the merger of a wholly owned subsidiary of Zhone Technologies, Inc. with and into DNS, with DNS surviving as our wholly owned subsidiary (the Merger). At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by its sole shareholder, DASAN Networks, Inc. (DNI), were canceled and converted into the right to receive shares of our common stock in an amount equal to 58% of the issued and outstanding shares of our common stock immediately following the Merger. In connection with the Merger, Zhone Technologies, Inc. changed its name to DASAN Zhone Solutions, Inc. The mailing address of our worldwide headquarters is 7195 Oakport Street, Oakland, California 94621, and our telephone number at that location is (510) 777-7000.

We are a global provider of network access solutions and communications equipment for service provider and enterprise networks. We research, develop, test, sell, manufacture and support communications equipment in five major areas: broadband access, Ethernet switching, mobile backhaul, passive optical LAN (POLAN) and software defined networks (SDN).

We research, develop and test products and technologies for our customers to purchase and deploy in their networks. We have development and test capabilities in five countries around the world. We are a global company with over 1,000 customers in more than 50 countries worldwide. We use a combination of both in-house and outsourced manufacturing of our products.

Broadband Access
Our broadband access products are at the core of our product strategy and offer a variety of options for carriers and service providers to connect residential and business customers. Our solutions allow carriers and service providers to either use high-speed fiber or leverage their existing deployed copper networks to offer broadband services to customer premises. Once our broadband access products are deployed, the service provider can offer voice, high-definition and ultra-high-definition video, high-speed internet access and business class services to their customers. We develop our broadband access products for all aspects of carrier and service provider access networks: customer premise equipment (such as digital subscriber line (DSL) modems), Ethernet access demarcation devices, Gigabit passive optical network (GPON) terminals, 10 Gigabit (10G) passive optical network (XGPON1/XGSPON/NGPON2) terminals and, Gigabit (GE) and 10G point-to-point Active Ethernet optical network terminals (ONTs). We also develop central office products, such as broadband loop carriers for DSL and voice-grade telephone service (POTS), high-speed digital subscriber line access multiplexers (DSLAMs) with G.fast and very-high-bit-rate DSL (VDSL) capabilities, optical line terminals (OLTs) for passive optical distribution networks like GPONs, 10G passive optical networks and 10G point-to-point Active Ethernet.

Ethernet Switching
Our Ethernet switching products provide a high-performance and manageable solution that bridges the gap from carrier access technologies to the core network. Over the past ten years carriers have migrated access infrastructure to Ethernet from time-division multiplexing and asynchronous transfer mode systems. Our products can also be deployed in data centers, blurring the line between central office and data center. Our products support pure Ethernet switching as well as layer 3 IP and multiprotocol label switching (MPLS) and are currently being developed for deployment as part of SDNs.

Mobile Backhaul
Our mobile backhaul products provide a robust, manageable and scalable solution for mobile operators that enable them to upgrade their mobile backhaul systems and migrate from 3G networks to LTE and beyond. We provide our mobile backhaul products to mobile operators or carriers who provide the transport for mobile operators. Our mobile backhaul products may be collocated at the radio access node (RAN) base station (BS) and can aggregate multiple RAN BS in to a single backhaul for delivery of mobile traffic to the RAN network controller. We provide standard Ethernet/IP or MPLS interfaces and interoperate with other vendors in these networks. With mobile backhaul networks providing carriers with significant revenue growth in recent years, mobile backhaul has become one of the most important parts of their networks.

Passive Optical LAN
Our FiberLAN portfolio of POLAN products are designed for enterprise, campus, hospitality and entertainment arena usage. Our FiberLAN portfolio includes our high-performance, high-bandwidth GPON OLTs connected to the industry’s most diverse ONT product line, which include units with integrated Power over Ethernet (PoE) to power a wide range of PoE-enabled access devices. Our environmentally friendly FiberLAN POLAN solutions are one of the most cost-effective LAN technologies that can be deployed, allowing network managers to deploy a future-proof, low-maintenance, manageable solution that requires less space, air conditioning, copper and electricity than other alternatives.

Software Defined Networks
Our SDN and network function virtualization (NFV) strategy is to develop tools and building blocks that will allow service providers to migrate their networks’ full complement of legacy control plane and data plane devices to a centralized intelligent controller that can reconfigure the services of hundreds of network elements in real time for more controlled and efficient provision of bandwidth and latency across the network. The migration to SDN and NFV will provide better service for end customers and a more efficient and cost-effective use of hardware resources for service providers. We will leverage our broadband access, mobile backhaul and Ethernet switching expertise to extract and virtualize many of the traditional legacy control and data plane functions to allow them to be run from the Cloud. The latest evolution of our hardware-based solution was designed to support SDN and NFV.

Industry Background
We believe growth in our business in the coming years will be driven by continued growth in worldwide demand for network access solutions and communications equipment that enable or support access to high-speed broadband services. The communications industry continues to experience rapid expansion with the internet and proliferation of bandwidth-intensive applications and services leading to increasing demands for high-bandwidth communications networks. The broad adoption of new technologies such as smartphones, digital video cameras and high definition and ultra high definition televisions allow music, pictures, user-generated content (as found on the many video-sharing sites) and high definition video to be a growing part of consumers’ regular exchange of information. In recent years, the growth of social communications and social networking has continued to place demands on existing access infrastructure and new consumer demands are challenging even the newest and most advanced infrastructures. All of these new technologies share a common dependency on high-bandwidth communication networks and sophisticated traffic management tools. However, network service providers have struggled to meet the increased demand for high-speed broadband access due to the cost of network infrastructure upgrades. As bandwidth demands continue to increase, carriers need to continue to upgrade their network infrastructure to support such demand. The infrastructure upgrade cycle typically has the effect of moving bandwidth bottlenecks from one part of the network to another (such as a carrier’s access network, core network or datacenters), depending on technology selection and cost.

It is widely believed that a fiber-optic connection that runs from customers’ premises all the way to the carrier’s datacenters is the best network architecture for a fixed network. This network architecture is called Fiber to the Premises (FTTP). However, FTTP is also typically the most expensive network solution, due to the associated build-out and equipment cost. Although many carriers have, to different degrees, adopted FTTP as their primary network architecture, many limit their use of FTTP to new greenfield builds and rely on hybrid fiber-copper topologies in their existing network in order to reduce cost. For example, popular and less costly alternatives to FTTP include Fiber to the Curb (FTTC) or Fiber to the Node (FTTN) network architecture. In these architectures, the carrier lays a fiber-optic cable to a street cabinet and then uses DSLAMs or Multiple Service Access Node (MSAN) to provide higher speed services to their customers over copper wire. Another trend in network access is the shift away from the legacy telephone switches (used in carrier networks from the 1980’s to the early 2000’s): many carriers that continue to provide services over copper wire are decommissioning their legacy telephone switches and moving services over to Voice over Internet Protocol (VoIP) platforms on an MSAN. Our broadband access products and solutions are designed to address these market trends by allowing carriers and service providers to either use fiber-optic networks or leverage their existing deployed copper networks to offer broadband services to customer premises.

With respect to mobile wireless networks, the popularity of mobile smartphones and increasing demand for mobile data has forced mobile network operators to upgrade their mobile access technologies from 3rd generation wireless (3G) to 4th generation wireless (4G or LTE) and to plan for 5th generation wireless technologies (5G). These technology upgrades are typically accompanied by network infrastructure upgrades, including upgrades to the carriers’ access networks (referred to as mobile backhaul), core networks and datacenters. Our mobile backhaul products provide a robust, manageable and scalable solution for mobile network operators that enable them to upgrade their mobile backhaul systems and migrate from 3G networks to LTE and beyond.
Another growing industry trend is the desire of carriers and service providers to simplify network operation and reduce costs. Increasingly, we see network operators seeking to reduce the number of active components in their networks and to centralize network data and control in datacenters, both of which require network redesigns and upgrades. Our FiberLAN portfolio of POLAN products, as well as our Ethernet switching products and SDN and NFV tools and building blocks, are designed to address these market trends, with POLAN emerging as a popular customer choice for network upgrades.