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26 October 2001

Netia announces further 10% headcount reduction

WARSAW, Poland - October 26, 2001 - Netia Holdings SA (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, today informed about the decision to reduce staff by around 10%. These cutbacks are in addition to the headcount reductions of 10% announced on March 30, 2001. The regulations on planned lay-offs have also been approved.

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. In August 2001, Netia launched its domestic long distance services based on indirect access. Netia has also secured the benefit of a nationwide data and IP license to provide data transmission and Internet-based services.