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WARSAW, Poland - December 13, 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 II B.V. will not make an interest payment of $6,562,500 on the 13 1/8% Senior Dollar Notes due 2009 or an interest payment of approximately EUR 6,750,000 on the 13 1/2% Senior Euro Notes due 2009. Both interest payments are due on December 15, 2001. If Netia Holdings II B.V. does not make these interest payments on or before the expiration of the applicable grace period on January 14, 2002, an "event of default" under the indentures governing these notes will have occurred. Netia also announced that Netia Holdings II B.V. will make an interest payment of $13,750,000 on its 13 3/4% Senior Euro Notes due 2010 pursuant to the terms of an investment agreement.

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. Pending further developments in relation to these discussions, it made the decision to withhold the interest payments on certain of the notes due on December 15, 2001.

Kjell-Ove Blom, Netia's acting CEO and Chief Operating Officer, said: "We are taking these actions towards recapitalizing our balance sheet, and we have already begun consensual discussions with the holders of our public debt. We intend to explore with our bondholders various options to reduce our total debt burden as well as our interest payment obligations in an effort to reach a satisfactory solution. In the meantime, Netia will continue to operate its business and satisfy its obligations consistent with its normal business practices."

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.