Current reports

The Management Board of Netia SA (“Company” or “Netia”) informs that on May 16, 2005 Netia Mobile Sp. z o.o. (“ Netia Mobile”) filed an application for the reservation of the UMTS frequency awarded to Netia Mobile in the tender proceedings completed by the Office of Telecommunications and Post Regulation (“URTiP”) on May 9, 2005. The application for the UMTS frequency reservation was filed upon the approval of Netia’s Supervisory Board and agreement with Novator Telecom Poland SARL, Netia’s partner. On May 9, 2005 Netia Mobile filed an application for the reservation of 99 GSM 1800 MHz channels. Netia will be a minority shareholder of Netia Mobile whereas Novator Telecom Poland will have the majority stake. Netia’s total financial engagement in the mobile venture will not exceed 100 million Euro. At the same time for Netia, the UMTS project creates significant new strategic opportunities to broaden its product offer, including convergent services, and to increase the number of accessible business customers. Netia Mobile is well positioned to succeed in the mobile market in Poland based on the strong financial condition of both shareholders, Netia and Novator. Moreover, Netia can leverage its base of existing business customers, potential users of UMTS products, as well as its infrastructure enabling a fast launch of services. Currently Netia is negotiating specific terms with international suppliers of telecom equipment interested in participating in the project including full vendor financing and /or other “pay as you grow” proposals. At the same time Netia is discussing the possibility of network interconnection and national roaming arrangements with the three existing Polish mobile operators. Once an agreement is reached with at least one of these operators, Netia Mobile will be able to provide its services using that mobile operator’s existing network.