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26 October 2000

Netia rejects participation in UMTS license tender


Warsaw, Poland - October 26, 2000 - Netia Holdings SA (Nasdaq: NTIA), Poland's largest alternative fixed-line telecommunications services provider, announced today that it will not participate in Poland's UMTS license tender. Netia's decision is based on the unattractive economics of the project according to the company's business analysis and experience, and has also been influenced by the uncertain regulatory framework, as well as the open-ended roaming and interconnection provisions for UMTS entrants as currently set out in the UMTS tender documentation.

For several months, Netia has been carefully making preparations to take part in the UMTS tender. After thorough consideration of the tender conditions, however, and after obtaining legal and consultants' opinions, Netia has decided not to establish its own consortium, nor to join other consortia which sought Netia's participation.

The company is particularly concerned with open-ended regulatory issues that have, in Netia's experience, complicated its ability to operate, e.g. in the field of long-distance telephony, and by numerous ambiguities in the tender documentation. These include the lack of clear provisions for roaming with the GSM operators, an issue closely related to the lack of an appropriate Polish interconnection regime in general. The other crucial factor in Netia's decision is the unattractive business potential of a UMTS investment due to the issuance of five rather than four licenses, and the size of the license fees.

Meir Srebernik, President and CEO of Netia, said "The current tender conditions do not satisfy Netia's criteria for a profitable business case and a clear regulatory framework.

"Netia will continue to execute its successful strategy to be Poland's best alternative fixed-line voice, data and IP services provider, capitalizing on the rapid growth of the Polish telecoms market."


NETIA HOLDINGS is the largest alternative fixed-line telecommunications operator in Poland. Netia has 24 licenses for local telecommunications services in territories covering some 15 million people or approximately 40% of the Polish population. The Company's existing local telephone license territories cover six of the country's ten largest urban areas including Warsaw, Krakow, Poznan, Gdansk, Lublin and Katowice. Netia has also secured the benefit of a nationwide data and IP license to provide data transmission and Internet-based services. In May 2000 the Netia 1 consortium was issued the nationwide domestic long distance voice license.