Current reports

Warsaw, Poland –January 8, 2008 – Netia SA (“Netia” or the “Company”) (WSE:NET), Poland’s largest alternative provider of fixed-line telecommunications services, is considering its options to finance its growth strategy during 2008-2009. Having received an indicative expression of interest to acquire Netia’s minority stake in P4 Sp. z o. (“P4”), on January 7, 2008, the Supervisory Board accepted Management’s proposal that a sale of Netia’s equity interest in P4 be considered as an alternative to issuing new equity as a means to fund Netia’s expansion plans.

The Company is getting ready to finance the further implementation of its strategy into 2008 and 2009. With more than 216,000 broadband customers already acquired, clearly establishing Netia as the leading altnet provider of broadband services in Poland, Management has been assessing its different financing options to increase the pace and further strengthen its position as the fastest growing provider of broadband Internet services.

In accordance with Netia’s strategy announced on April 18, 2007, the continued acceleration of broadband customer acquisition and capital investment in the unbundling of the incumbent’s local loop during 2008 and 2009 requires additional capital to be raised during 2008. Management have concluded that an earlier, profitable exit from the P4 investment as opposed to a new equity issue to support expansion should be fully examined prior to recommending the alternative of a share issue. In this regard, Netia has received an indicative expression of interest in acquiring its minority stake in P4.

Netia’s Management will conduct a thorough analysis of the options between divesting its 23.4% stake in mobile operator P4, thereby further intensifying its focus on its broadband activities on the one hand, and raising additional equity financing to support both broadband and P4 development in line with the current strategy on the other. In this latter case, the decision to issue new shares will be taken at a shareholder meeting likely to be held in the first quarter of 2008.

P4 is Poland’s fourth mobile operator and commenced its commercial operations on March 16, 2007. On December 3, 2007, P4 informed that they had surpassed 700,000 subscribers and were well on the way to surpassing their full year guidance target of 750,000 subscribers. Netia believes that its 23.4% stake in P4 is currently worth significantly in excess of the Euro 79.5 million that Netia is committed to contributing to the project and that value continues to build as customers are added and P4’s network is rolled out. However, Netia expects that significant additional equity contributions and extended shareholder support will be necessary in order to secure debt financing sufficient to fund P4 through to cash flow break-even.

Participation as a founding investor in P4 has delivered important commercial agreements with P4 for Netia to provide mobile telephony services over P4’s network and for Netia to provide data transmission services to P4. These agreements remain in force regardless of Netia’s status as a P4 shareholder and would remain important to the future development of Netia.

Any potential disposal of Netia’s interest in P4 will be subject to future formal consent of the Supervisory Board, while any decision to issue new shares will require formal shareholders’ approval.

Supervisory Board Members affiliated with P4’s majority shareholder, Constantine Gonticas and Bruce McInroy, neither participated in the Supervisory Board’s discussions nor voted on the resolution on this matter.