As Netia decided to withhold from providing an English version of its website, these of the company Followers who would be interested in subscribing Netia reports in Polish are kindly requested to register in the box below

12 August 2003

Government’s decision on conversion of Netia’s local license fee obligations

WARSAW, Poland. - August 12, 2003 - Netia S.A. (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services today announced that on August 7, 2003 the Minister of Infrastructure of Poland issued decisions in connection with applications for deferral and conversion of local license fee obligations submitted in December 2002 by the following subsidiaries of Netia: Netia Telekom Telmedia S.A., Netia Telekom Mazowsze S.A., Netia Telekom Silesia S.A. Specifically, in these decisions the Minister of Infrastructure promised to cancel the outstanding license fee obligations amounting to EUR 91,385 (PLN 399,444 at the exchange rate prevailing at August 7, 2003) and the outstanding prolongation fees of PLN 15,799 (converted in the decision into EUR 3,969 using the exchange rate prevailing at November 29, 2002) owed in connection with prior deferrals granted to Netia’s subsidiaries, upon verification by the Ministry of Infrastructure of incurred investments as reported in accordance with the law on conversion of license fee obligations enacted in December 2002. The Minister also deferred those license fee obligations and prolongation fees until September 30, 2004. Based on these decisions all outstanding local license fee obligations of the Netia group companies will be cancelled based on investments incurred in 2001 and 2002, provided such investments are verified by the Ministry of Infrastructure in accordance with the applicable law.

Some of the information contained in this news release contains forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. For a more detailed description of these risks and factors, please see Netia's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F filed with the Commission on June 27, 2003, its Current Report on Form 6-K filed with the Commission on June 30, 2003 and its Current Report on Form 6-K filed with the Commission on August 8, 2003. Netia undertakes no obligation to publicly update or revise any forward-looking statements.