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19 February 2008

Netia acquires another Internet service provider (8/2008)

WARSAW, Poland – February 19, 2008 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that on February 18, 2008 Internetia Sp. z o.o. with its seat in Warsaw (“Internetia”), Netia’s subsidiary, purchased from: Ms. Marlena Lewandowska, Mr. Dariusz Lewandowski, Mr. Jerzy Kołodziej, Mr. Krzysztof Staś and Mr. Ryszard Szyłak (the “Sellers”) 200 shares in the share capital of a company operating under the business name Przedsiębiorstwo Informatyczne Punkt Sp. z o.o. with its seat in Opole (“Punkt”) with the total nominal value of PLN 100,000 for all these shares, which represent 100% of the share capital and confer the right to 100% of the votes at the general meeting of shareholders of Punkt (the “Shares”). The total price of all the Shares has been set at PLN 5.1 million. This represents an equivalent of the value of Punkt’s active customers as agreed with the Sellers of PLN 4.2 million, increased by balances of the cash and cash equivalents held by Punkt, and decreased by Punkt’s debt and overdue liabilities as at February 13, 2008. The purchase price may be increased up to PLN 6.7 million  in case of the fulfillment of certain conditions included in the Shares purchase agreement and related to execution of certain transactions by Punkt’s business partners.

The acquisition of Shares was effected following the payment of PLN 5.1 million of the price specified in the Shares purchase agreement concluded by Internetia and Punkt on February 13, 2008.

Punkt is a service provider offering broadband Internet access to residential clients in the town of Opole in the Silesian region of Southern Poland. The company is using FastEthernet technology, which allows for transmission speed of up to 100 Mb/s. As of February 13, 2008, Punkt’s network provided broadband access to 4,367 clients, with approximately 14,000 households passed.

The acquired Shares constitute assets of substantial value, as they represent 100% of the share capital of Punkt. The assets described above were acquired from Internetia’s own resources and constitute an investment of a long-term nature.

Apart from the contractual relations described in this report, there exist no other ties between Netia and the persons managing or supervising Netia and the Sellers of the aforementioned assets.

The acquisition represents yet another step in execution of Netia’s strategy aimed at acquiring 1 million broadband customers over the next three years, including consolidation of local Ethernet networks. Including the recent acquisition, Netia’s broadband customer base surpassed 240,000 clients.