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18 December 2006

Completion of El-Net’s license fee obligations’ restructuring process

WARSAW, Poland – December 18, 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 December 14, 2006, with regard to the cancellation of all outstanding 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), as well as the prolongation fees owed in connection with the prior deferrals of the license fee installments, in exchange for investments in the telecommunications infrastructure made by the Company from January 1, 2003 to July 31, 2006. The nominal value of license fee obligations and prolongation fees cancelled based on the above decisions amounts to EUR 74,509,116.07 and PLN 25,606,456.31, respectively.

The above decisions followed the decisions of the Minister of Infrastructure, dated September 14, 2006, amending the previous decisions issued to El-Net by the Minister of Infrastructure on July 12, 2004, and the Minister of Transport and Construction on March 28, 2006 (see Netia’s press releases dated September 20, 2006, August 17, 2004 and April 4, 2006), with regard to the deferral and promise to cancel the license fee obligations.

The receipt of the above decisions completes the process of El-Net’s license fee liabilities’ restructuring. The total nominal value of license fee obligations and prolongation fees cancelled under this process amounted to EUR 104,623,596 and PLN 37,733,239, respectively. Based on the received decisions, the outstanding license fee obligations, including prolongation fees, will be reduced to zero in Netia’s financial results for the fourth quarter of 2006 and this cancellation will be reflected in the statements of operations.