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12 July 2001

Netia files court claim for compensation in relation to delays in launching DLD services

WARSAW, Poland - June 12, 2001 - Netia Holdings SA (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, today announced that it has filed with the Court of Warsaw a claim against the State Treasury of the Republic of Poland and the Ministry of Communications for compensation in the amount of PLN 183 million (approximately EUR 54 million or $46 million) for delays that prevented the timely launch of its domestic long distance (DLD) services. In addition, Netia has made a claim for the return of EUR 24 million (approximately PLN 82 million or $20 million) in DLD license fees paid by the company.

Netia claims that significant delays by the Ministry of Communications - first in issuing the DLD license to Netia, and subsequently, in ruling on the arbitration case brought by Netia regarding the terms of interconnection to network of Telekomunikacja Polska S.A., the incumbent operator, - have damaged the company's interests by preventing it from launching DLD services on schedule.

Netia petitioned for the return of EUR 24 million paid to date in respect of its domestic long distance license, claiming that the license's fifteen-year term was invalidated by the introduction of Poland's new Telecommunications Act on January 1, 2001. The new law requires only a permit, issued at administrative cost, for any new entrant to provide DLD services. Netia has also requested the Court to ask Poland's Constitutional Tribunal for a ruling on the constitutionality of the Telecommunications Act's abolition of license fees without reference to the rights and interests of entrants who paid for previous licenses on the basis of their duration and anticipated economic value.

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, Netia was issued a nationwide domestic long distance voice license.