Netia applies for further refund of license fees
WARSAW, Poland - May 16, 2001 - Netia Holdings SA (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, today announced that various Netia subsidiaries have applied to the Telecommunication Regulation Office (URT) to confirm the terms of their operating permits and demand a return of approximately EUR 92 million in license fees. On April 18, Netia applied for a return of EUR 24 million in license fees paid for its domestic long distance license.
As a result of Poland's new Telecommunications Act that came into force on January 1, 2001, telecommunications licenses issued on the basis of the previous regulatory regime expired or became permits as defined by the new legislation. Certain Netia subsidiary companies have therefore applied to the President of the URT to settle the conditions of providing telecommunications services and to confirm, on the basis of previous licenses, the conditions of their telecommunication permits for public network exploitation as stated in article 3 of the new Telecommunication Act.
Netia has also requested a return of the Polish zloty equivalent of EUR 92 million in license payments made by the subsidiary companies, due to the expiry of the licenses: for Netia Telekom Mazowsze S.A. the amount of EUR 58 million, and for Netia Telekom Telmedia S.A. and Netia Telekom Silesia S.A., the amount of EUR 34 million.
Netia submitted these applications based on the fact that the amounts it agreed to pay for the licenses were directly connected to the foreseeable date of receiving the licenses, the period of the license protection and forecast revenues from the license activities, which were supposed to provide the economic justification for the costs and investments borne by each of the companies. As a result of the passing of the new Telecommunications Act and the expiry of the licenses on January 1, 2001, the protection period has been reduced from the fifteen years foreseen when the licenses were granted to at most three years, and in case of Netia Telekom Mazowsze S.A., six months. This has stripped the licenses of substantial economic value.