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20 September 2006

Decisions issued in the process of conversion of El-Net’s license fee obligations

WARSAW, Poland – September 20, 2006 – Netia SA (“Netia”, the “Company”) (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services, announced that it received today the decisions of the Minister of Transport, dated September 14, 2006, amending the previous decisions of the Minister of Infrastructure, dated July 12, 2004, and the Minister of Transport and Construction, dated March 28, 2006 (see Netia’s press releases dated August 17, 2004 and April 4, 2006), with regard to the deferral and promise to cancel the license fee obligations of Regionalne Sieci Telekomunikacyjne El-Net SA (“El-Net”), a company that merged with Netia on July 31, 2006 (see Netia’s press release dated August 1, 2006). The amendments to the above mentioned decisions follow Netia’s motion and enable conducting the restructuring of license fee obligations based on the capital investments incurred by Netia from January 1, 2003 to July 31, 2006.

The receipt of the above decisions constitutes a significant element in the ongoing process of El-Net’s license fee liabilities’ cancellation. The nominal value of outstanding license fee obligations and prolongation fees amounts to EUR 74,509,116.07 and PLN 25,606,456.31, respectively, while capital expenditures declared for the purpose of license fees conversion amount to EUR 88,590,243.