1105472--2/25/2010--SONUS_NETWORKS

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Our quarterly revenue and operating results are unpredictable and may fluctuate significantly from quarter to quarter, which could adversely affect our business, financial condition, results of operations and the trading price of our common stock. Our stock price has been and may continue to be volatile. We have incurred net losses and may incur additional net losses. World-wide efforts to cut capital spending, general economic uncertainty and a weakening global economy could have a material adverse effect on us. We have adopted a new strategic focus and we are shifting our resources to support that new focus. If our new strategic plan is not aligned with the direction our customers take as they invest in the evolution of their networks, customers may not buy our products or use our services. We are dependent upon our voice infrastructure products, and our future revenues depend upon their commercial success. If we do not respond rapidly to technological changes or to changes in industry standards, our products could become obsolete. If we fail to compete successfully against incumbent telecommunications equipment companies, our ability to increase our revenues and sustain profitability will be impaired. If we do not anticipate and meet specific customer requirements or if our products do not interoperate with our customers' existing networks, we may not retain current customers or attract new customers. The market for voice, data and video infrastructure products for the public network is evolving and our business will suffer if it does not develop as we expect. We expect that a majority of our revenue will be generated from a limited number of customers and we will not be successful if we do not grow our customer base. If we are unable to generate recurring business from our limited number of existing customers, our financial position and results of operations could be materially and adversely affected. Our large customers have substantial negotiating leverage, which may require that we agree to terms and conditions that may have an adverse effect on our business. Due to our reliance on significant customer contracts, we have financial exposure to the continued financial stability of our customers. We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could result in material losses. We rely on distribution partners to sell our products in certain markets, and disruptions to, or our failure to effectively develop and manage, our distribution channel and the processes and procedures that support it could adversely affect our ability to generate revenues from the sale of our products in those markets. We may face risks associated with our international expansion that could impair our ability to grow our international revenues. If we fail to manage the operational and financial risks associated with our international operations, it could have a material adverse effect on our business, results of operations and financial condition. Our use and reliance upon development resources in India may expose us to unanticipated costs and/or liabilities. We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets. We face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards. Our ability to compete and our business could be jeopardized if we are unable to protect our intellectual property or become subject to intellectual property rights claims, which could require us to incur significant cost; additionally, in some jurisdictions, our rights may not be as strong as we currently enjoy in the United States. Because our products are sophisticated and designed to be deployed in complex environments, they may have errors or defects that we find only after full deployment, which could seriously harm our business. If we are not able to obtain necessary licenses of third-party technology at acceptable prices, or at all, our products could become obsolete. Because our products are deployed in large, complex networks around the world, failure to establish a support infrastructure and maintain required support levels could seriously harm our business. Man-made problems such as computer viruses or terrorism may disrupt our operations and harm our operating results. Provisions of our stockholder rights plan, charter documents and Delaware law have anti-takeover effects that could prevent a change of control. Actions that may be taken by significant stockholders may divert the time and attention of our board of directors and management from our business operations. Failure or circumvention of our controls and procedures could impair our ability to report accurate financial results and could seriously harm our business. Changes in our business strategy related to product and maintenance offerings and pricing could affect vendor specific objective evidence ("VSOE") and revenue recognition. Any changes to existing accounting pronouncements or taxation rules or practices may cause adverse fluctuations in our reported results of operations or affect how we conduct our business. If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings. If we fail to hire and retain needed personnel, the implementation of our business plan could slow or our future growth could halt. We have a limited number of shares available to issue to our employees, which could impact our ability to attract, retain and motivate key personnel. Restructuring activities could adversely affect our ability to execute our business strategy. If we are subject to employment claims, we could incur substantial costs in defending ourselves. We depend upon a single contract manufacturer and any disruption in this relationship may cause us to fail to meet the demands of our customers and damage our customer relationships. We and our contract manufacturer rely on single or limited sources for supply of some components of our products and if we fail to adequately predict our manufacturing requirements or if our supply of any of these components is disrupted, we will be unable to ship our products. Failure by our strategic partners or by us in integrating products provided by our strategic partners could seriously harm our business. Any investments or acquisitions we make could disrupt our business and seriously harm our financial condition. We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. Consolidation in the telecommunications industry could harm our business. Regulation of the telecommunications industry could harm our operating results and future prospects. Changes in government regulation relating to healthcare reform could negatively affect our operating results and revenues.

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1105472--2/25/2010--SONUS_NETWORKS_INC