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01 August 2000

Netia subsidiaries enter into hedge transaction

WARSAW, Poland - August 1, 2000 - Netia Holdings SA (Nasdaq: NTIA), Poland's largest alternative fixed-line telecommunications services provider, announced that on July 31, 2000, Netia Telekom S.A. and Netia South Sp. z o.o., two wholly-owned subsidiaries of Netia Holdings S.A., entered into a hedge transaction with the London branch of Chase Manhattan Bank.

Under the terms of the transaction, the two Netia subsidiaries swapped their coupon payments on US$200 million aggregate amount of 10.25% senior notes due 2007, for coupon payments on PLN 430.0 million aggregate principal amount of 12.74% notes and PLN 430.9 million aggregate principal amount of 12.775% notes. The coupons will be swapped during the period commencing on May 1, 2001 and terminating on November 1, 2005.

Avi Hochman, Netia's Chief Financial Officer, commented: "This transaction marks the beginning of currency hedging as a long-term policy of Netia. We have been able to secure these hedges against our foreign currency obligations on favourable terms."

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. 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.