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30 March 2001

Netia subsidiary enters hedge transaction

Warsaw, Poland - March 30, 2001 - Netia Holdings SA (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, announced that today Netia Telekom S.A., a wholly-owned subsidiary of Netia Holdings SA, entered into a hedge transaction with Merrill Lynch Internetional.

Under the terms of the transaction, the Netia subsidiary swapped the coupon payments on USD 193.5 million aggregate amount of 11.25% senior discount notes due 2007, for coupon payments on PLN 795.95 million aggregate principal amount of 13.81% notes, and swapped the coupon payments on DM207.1 million aggregate amount of 11% senior discount notes due 2007, for coupon payments on PLN 388.5 million aggregate principal amount of 13.81% notes.

The coupons will be swapped during the period commencing May 1, 2002 and terminating November 1, 2005.

Avi Hochman, CFO of Netia Holdings SA, commented on the transaction: "We again managed to close a hedging transaction on very good terms, taking advantage of attractive market conditions. We now have swapped 80% of our coupon payments to Polish Zlotys, which will help us to decrease our foreign exchange exposure. We intend to continue our hedging policy whenever the right conditions are available."

NETIA HOLDINGS is the largest alternative fixed-line telecommunications operator in Poland. Netia has 24 licenses for local telecommunications services in territories, covering some 15 million people or approximately 40% of the Polish population, which include the most economically advanced parts of the country. The Company's existing local telephone license territories cover six of the country's ten largest urban areas including Warsaw, Krakow, Poznan, Gdansk, Lublin and Katowice. Netia has also secured the benefit of a nationwide data and IP license to provide data transmission and Internet-based services. In May 2000 the Netia 1 consortium was issued the nationwide domestic long distance voice license.