New Z-Tel Voice Network Targets Delivery of Powerful New Services, Further Reduction in Reliance on ILEC Infrastructures and Reduced Operating Costs

TAMPA, Fla.--(BUSINESS WIRE)--April 20, 2000 – Gregg Smith, Chairman President and Chief Executive Officer of Z-Tel Technologies, Inc. (Nasdaq/NMS: ZTEL), today announced that the Company will begin installing a next-generation network backbone that will include Sonus Networks' carrier-class Packet Telephony suite. This new infrastructure will help Z-Tel deliver a range of innovative new services based on packet telephony to be exported across the Company's markets. Z-Tel currently sells web interactive local and long distance phone service to consumers under the Z-Line Home Edition name. Sonus Networks is a leading provider of voice infrastructure products for the new public network. 

"We have already seen indications of strong customer acceptance of our Z-Line Home Edition service in New York and Texas," said Mr. Smith. "We now estimate that we have ten central offices in the New York City area that have over 3,000 Z-Line Home Edition customers. With these kinds of densities around certain central offices, we can then selectively install our new switching infrastructure. Once completed, we expect to see a reduction in monthly transport costs. While we continue to refine the end to end cost of deploying this switching infrastructure, we expect the capital cost per subscriber to be less than $25. The combination of the increased capabilities of a packet telephony backbone and transport savings make this a highly attractive investment for Z-Tel." 

As part of its initial network rollout, Z-Tel will be deploying Sonus' carrier-class Packet Telephony suite, including the GSX9000(TM) Open Services Switch, the PSX6000(TM) SoftSwitch and the SGX2000(TM) SS7 Signaling Gateway. Z-Tel will target the delivery of a new packet telephony network in selected cities, with plans to expand coverage to all of Z-Tel's markets. By implementing Sonus' solutions, Z-Tel moves towards the delivery of new powerful voice-over-packet services. 

James Kitchen, Z-Tel's Senior Vice President of Network Strategy, stated, "In Sonus, we have found a technology source that understands Z-Tel's technological and business objectives. They provided not only a comprehensive solution, but also a clear roadmap to the many issues facing both voice carriers and enhanced service providers. Sonus' Packet Telephony suite meets our requirements for reliability, scalability and interoperability, and, more importantly, enhances our ability to build our own intellectual property with regard to intelligent routing, messaging services and contact management services." 

This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. In order for the Company to utilize the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, you are hereby cautioned, and the Company hereby notes, that these statements may be affected by the risk factors described in detail in Z-Tel's prospectus dated December 15, 1999, filed pursuant to Rule 424(b) of the Securities Act of 1933 and included as part of Z-Tel's Registration Statement on Form S-1, as amended, for its initial public offering of common stock; the Company's 1999 Annual Report on Form 10-K, filed March 28, 2000; and in the Company's other filings with the Securities and Exchange Commission, including, specifically, the risk that the Company will be unable to efficiently and successfully enter new markets; the risk that unbundled network elements will cease to be available in their present form in states that have adopted favorable pricing rules for such elements; the risk that additional state regulatory commissions will not adopt favorable pricing rules for unbundled network elements; and the risk that the Company may be unable to install and integrate successfully Sonus Networks' technology. The Company undertakes no obligation to update or revise any such forward-looking statements. 

About Z-Tel Technologies Z-Tel Technologies, Inc. provides consumers bundled local and long distance telephone services, combined with enhanced, Internet-based communications features that enable them to manage all of their voice communications needs. Z-Tel currently sells this bundle as "Z-Line Home Edition" in New York, Texas and Massachusetts, and has more than 100,000 active subscribers. For more information about this innovative new service or about Z-Tel, please visit the Company's web site at www.z-tel.com. 

About Sonus Networks Sonus Networks, Inc. is a leading provider of voice infrastructure products for the new public network. Sonus' solutions enable service providers to deploy an integrated network capable of carrying both voice and data traffic, and to deliver a range of innovative, new services. Sonus' Open Services Architecture(TM) (OSA) and award-winning Packet Telephony suite cut the time-to-market for competitive new service products, allowing carriers and third-party developers to expand marketshare, and build important new revenue streams. Its highly scalable products fully interoperate with and extend the life and utility of today's public network. Sonus embodies in its management and staff decades of experience in developing carrier-class solutions at companies such as Cisco Systems, Lucent Technologies, and Nortel Networks. Sonus, founded in 1997, is headquartered in Westford, Massachusetts and is privately held. 

GSX9000, PSX6000, SGX2000 and Open Services Architecture are trademarks of Sonus Networks. All other company and product names are trademarks of Z-Tel Technologies, Inc.