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12 June 2008

Netia acquires another Internet service provider (31/2008)

WARSAW, Poland – June 12, 2008 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, announced that on June 11, 2008 Internetia Sp. z o.o. with its seat in Warsaw (“Internetia”), Netia’s subsidiary, purchased from Messrs. Marcin Palkowski and Krzysztof Białek (the “Sellers”) 11,300 shares in the share capital of a company operating under the business name Connect Systemy Komputerowe Sp. z o.o. with its seat in Białystok (“Connect”) with the total nominal value of PLN 565,000 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 Connect (the “Shares”). The total price for the Shares has been set at PLN 4.5 million.

Connect is a service provider offering broadband Internet access to residential clients in the towns of Białystok and Suwałki in North-Eastern Poland. The company is using FastEthernet technology, which allows for transmission speed of up to 100 Mb/s. As of June 10, 2008, Connect’s network provided broadband access to 4,630 clients, with approximately 19,300 households passed.

The acquisition of Shares was effected based on the Shares purchase agreement concluded by Internetia and Connect on June 10, 2008.

The acquired Shares constitute assets of substantial value, as they represent 100% of the share capital of Connect. 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.

This transaction brings the number of FastEthernet acquisitions completed by Netia since mid 2007 to fourteen. The above companies provide broadband access to a total of approximately 46,000 customers, with approximately 155,000 households passed. In May 2008 Netia began to upsell voice services to the customers of acquired companies, who used so far only Internet access services.
Extending the reach of Netia’s own infrastructure and customer base via acquisition and integration of such businesses is an important element of Netia’s strategy aimed at acquiring 1 million broadband customers over the next three years.