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01 February 2007

Transfer of ownership of telecommunications network elements to Netia’s subsidiary Świat Internet SA

WARSAW, Poland – February 1, 2007 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that on January 31, 2007, the ownership of the elements of Netia’s telecommunications network, classified as material assets and including, in particular, the specified telecommunications lines and ducts, was transferred to Netia’s subsidiary operating under the business name Świat Internet Spółka Akcyjna (the “Company”). The transfer of the above mentioned assets (the “Contribution”) was made in execution of the agreement dated January 22, 2007 (see Netia’s press release dated January 23, 2007), following the registration of the Company’s share capital increase (see Netia’s press release dated February 1, 2007).

The transfer of ownership of the Contribution was made in exchange for the taking up by Netia of 95,070,274 new, ordinary registered series M shares, PLN 10 par value per share, at the price equal their total nominal value of PLN 950,702,740. The newly issued series M shares taken up by Netia together with the remaining shares of the Company possessed by Netia represent 99.99% of the Company’s share capital and 99.99% of the overall number of votes at the Company’s general shareholders’ meeting. Pro Futuro SA, Netia’s wholly owned subsidiary, is the second shareholder of the Company, whose shares represent 0,01% of the Company’s share capital and 0,01% of votes at the general shareholders’ meeting.

The gross book value of the Contribution as at December 31, 2006 disclosed in Netia’s accounts equals PLN 1,797,938,828.52; the accumulated depreciation of the assets composing the Contribution equals PLN 545,201,704.21 as at December 31, 2006; and the accumulated impairment recognized until December 31, 2005 amounts to PLN 470,101,177.88. The Contribution is brought to the Company in the value resulting from the valuation conducted by a property appraisal expert.

The above Contribution was classified as material assets, based on the criterion of its value towards the current value of Netia’s equity.

The elements of the telecommunications network composing the Contribution were, prior to their transfer to the Company, used to carry out the telecommunications activity of Netia, and would be used in the same manner in the Company in the future.

The Company is an affiliate of Netia (a subsidiary company). Moreover, the following persons being members of the bodies of the Company also serve in Netia’s bodies: Mr. Piotr Czapski, Mr. Paul Kearney and Mr. Jonathan Eastick – as management board members in both Netia and the Company; Mr. Piotr Nowak - as a proxy in Netia and a management board member in the Company; Mr. Paweł Karłowski and Mr. Tom Ruhan - as management board members in Netia and supervisory board members in the Company.

This transaction affects the stand-alone accounts of Netia and the Company, but has no impact on the consolidated group accounts of Netia.