Current reports

WARSAW, Poland - October 10, 2000 - Netia Holdings SA (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, today released a mid-quarter update on its operational progress, ahead of a series of analyst presentations by the management regarding Netia's strategy and operations, to be held in Warsaw today.

Meir Srebernik, Netia President and CEO, said: "During this quarter Netia surpassed the 300,000 subscriber line mark at August 31, 2000, underscoring our position as the largest alternative provider of fixed-line local telephone services in Poland. The company is successfully positioning itself to be the leading alternative provider of voice, data and internet services in the fast-growing Polish telecoms market, serving corporate, SME and high-end residential customers in the country's ten largest urban areas. Our Internetia dial-up internet service has just completed the second phase of its roll-out, with nearly 25,000 customers. We are making the necessary last stage preparations for launch of domestic long-distance service and to enter the Warsaw local voice market, and we continue to evaluate the best approach regarding the upcoming UMTS mobile license tender."

Operational highlights

• Number of subscriber lines in service increased to 303,143 at August 31, 2000 from 286,259 at June 30, 2000.
  
  
• Business lines as a percentage of total subscriber lines reached 23.0% at August 31, 2000, up from 22.1% at June 30, 2000. Incremental business mix for the period January through August 2000 amounted to 38.0%.
  
  
• Number of business customer lines in service increased to 69,799 (from 63,217 at June 30, 2000.On September 15, 2000 Internetia commenced the second phase of its Internet dial-up service offering. The number of Internetia active and registered users paying for service doubled to 24,354 at September 30, 2000 from 12,030 at June 30, 2000. Netia's goal is to be a leading Polish IP and data company.

Domestic long distance market:

Netia 1 is in the final stage of operational preparations to launch domestic long distance voice services nationwide, as the first entrant in this newly competitive market. With a successful fixed-line customer base and brand already in place, Netia is well positioned and is targeting a long-term market share of over 20% of the Polish DLD market. To clear the way for the launch of DLD service, Netia must await a decision by the Ministry of Communications on a final interconnect agreement with TP S.A. On 18 September, 2000 Netia 1 filed a motion for arbitration to resolve the interconnection issue. The Minister of Communications publicly informed that the decision in this case will be issued immediately.

Warsaw local voice market:

Netia is operationally ready to launch voice telephony services in Warsaw, which represents 40% of Poland's telecommunications market and is home to 30% of Poland's top 500 companies and 60% of multinational companies. The entry into Warsaw will thus significantly strengthen Netia's coverage area and represents a key milestone in the company's strategy to be present in all of Poland's ten largest cities. Netia is currently in negotiations on an interconnect agreement with TP S.A., which is necessary prior to the launch of service in Warsaw.

UMTS Mobile tender process:

The Ministry of Communications today made available the tender documents for UMTS mobile licenses. Netia is examining the documents and will make a formal evaluation of its approach shortly. Netia reiterated its statement made on August 31, 2000 that while deciding whether to participate in the UMTS tender, Netia will adhere to the strict financial business model that has guided Netia's previous license bids.