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28 April 2006

Netia signs managed services contract with Ericsson

WARSAW, Poland – April 28, 2006 – Netia SA (“Netia” or “Company”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, announced that today Netia signed a five-year managed services contract with Ericsson. The contract covers maintenance and management of the Netia Group’s networks, as well as the support in the provision of standard services to Netia Group customers, inclusive of the installation of lines at customer’s site. Approximately 300 Netia employees will be transferred to Ericsson under the scope of this contract. The total value of the transaction does not exceed 10 per cent of Netia’s total equity as at December 31, 2005.
The transaction consists of two joint elements: (I) the contract covering services provision and (II) transfer contracts concerning employees, assets and agreements of the Netia Group. The infrastructure and telecommunications lines will remain the property of the Netia Group. Investment projects will also remain Netia Group’s responsibility. The Netia Group will be the owner of network and equipment installed in the future.
Thanks to the cooperation with Ericsson the Netia Group will gain more flexibility in extending its telecommunications network and will expand its geographical coverage without the increase of employment in departments dealing with network maintenance and customer installations. This will directly influence the reduction of employment costs.
The contract with Ericsson provides that the employees will be transferred on the basis of art. 231 of the Labor Code and will retain current work and remuneration conditions.
Ericsson is the leading company on the market of managed services. Networks managed by Ericsson cover over 60 million customers worldwide. The managed services business is of strategic importance to Ericsson’s development in Poland and worldwide. The company’s experience, flexibility in the negotiations process and the guarantee of employment and further development of employees to be taken over have influenced the decision to choose Ericsson for the project.