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17 August 2004

The promise to cancel liabilities resulting from the license for rendering local telecommunications services

The Management Board of Netia S.A. (hereinafter referred to as the “Company” or “Netia”) informs that in reply to the application filed in December 2002 by Regionalne Sieci Telekomunikacyjne El-Net S.A. (Netia’s subsidiary), Regionalne Sieci Telekomunikacyjne El-Net S.A. received on August 16, 2004 a decision of the Minister of Infrastructure fully in compliance with RST El-Net’s application. By the above decision the Minister of Infrastructure granted the promise to cancel the outstanding licence fees obligations, resulting from licenses for rendering local telecommunications services, amounting to 75,689,596.00 EUR and the prolongation fees amounting to 9,038,567.15 EUR owed in connection with prior deferrals of licence fees instalments granted to RST El-Net. The above cancellation shall occur upon the verification of incurred investments documented pursuant to provisions of article 8 of the act dated November 23, 2002 on the conversion of licence fees of fixed line public telecommunications operators (hereinafter referred to as the “Act”). The Minister of Infrastructure also decided that RST El-Net’s investments can be incurred from January 1, 2001 till December 30, 2006, upon the assumption that investments already incurred by RST El-Net S.A. in 2001-2003 amounted to 85,458,931.10 PLN. Based on this decision all outstanding local license fees obligations of RST El-Net S.A. will be cancelled based on investments incurred in 2001 - 2003, as well as investments to be incurred till December 30, 2006, provided such investments are verified by the Ministry of Infrastructure in accordance with the Act.