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17 December 2001

Netia makes announcement on swap payment


WARSAW, Poland - December 17, 2001 - Netia Holdings S.A. (the "Company" or "Netia") (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, announced today that its subsidiary Netia Holdings III B.V. did not make a payment of approximately PLN 70.64 million (approximately $17.66 million) due on December 17, 2001, in return for which Netia would have received approximately $6.6 million and approximately EUR 6.7 million, pursuant to its cross-currency swap agreement with JP Morgan Chase Bank entered into on January 18, 2001, pending discussions as to the renegotiation of the swap.

Netia previously announced plans to engage in discussions with its bondholders concerning a consensual reorganization of its balance sheet to reduce its debt and interest burdens and that it would be withholding the interest payment to which its swap payment relates.

Netia is the leading alternative fixed-line telecommunications provider in Poland. Netia provides a broad range of telecommunications services including voice, data and Internet-access and commercial network services. Netia's American Depositary Shares ("ADSs") are listed on the Nasdaq National Market (NTIA), and the Company's ordinary shares are listed on the Warsaw Stock Exchange. Netia owns, operates and continues to build a state-of-the-art fiber-optic network that, at September 30, 2001, had connected 343,634 active subscriber lines, including 93,713 business lines. Netia currently provides voice telephone service in 24 territories through Poland, including in six of Poland's ten largest cities.



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 the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F filed with the Commission on April 30, 2001, its Current Report on Form 6-K filed with the Commission on May 15, 2001, its Current Report on Form 6-K filed with the Commission on August 7, 2001, and its Current Report on Form 6-K filed with the Commission on November 6, 2001. The Company undertakes no obligation to publicly update or revise any forward-looking statements.