Current reports

WARSAW, Poland – November 21, 2008 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, announced that on November 20, 2008 Connect Systemy Komputerowe Sp. z o.o. with its seat in Białystok („Connect”), Netia’s subsidiary, purchased from Mr. Mariusz Głębocki and Mr. Zbigniew Karwowski (the “Sellers”) 100 shares in the share capital of a company operating under the business name Netster Sp. z o.o. with its seat in Łomża (“Netster”) with the total nominal value of PLN 50,000, which represent 100% of the share capital and confer the right to 100% of the votes at the general meeting of shareholders of Netster (the “Shares”) for the amount of PLN 357,665.59 (say: three hundred fifty seven thousand six hundred sixty five 59/100) for all these shares. This price represents an equivalent of the value of Netster’s active customers as agreed with the Sellers of PLN 694,200, increased by balances of the cash and cash equivalents held by Netster, and decreased by Netster’s debt and outstanding liabilities as at November 20, 2008.

Netster is a service provider offering broadband Internet access to residential clients in the city of Łomża. The company is using FastEthernet technology, which allows for transmission speed of up to 100 Mb/s. As of November 20, 2008, Netster’s network provided broadband access to 1,068 clients, with approximately 5,000 households passed.

The acquisition of Shares was effected based on the Share purchase agreement (“Share purchase agreement”) concluded by Connect and the Sellers on 20 November, 2008 as a result of the payment by Connect of the price indicated above.

The purchase price may be increased by PLN 25,000 constituting the amount that Netster will obtain from the sale of all its shares in IQSerwis Sp. z o.o. with its seat in Warsaw, provided that a respective share purchase agreement is concluded till December 15, 2008, and the payment for the shares sold by Netster is executed till December 22, 2008.

The acquired Shares constitute assets of substantial value, as they represent 100% of the share capital of Netster. The assets described above were acquired from Connect’s own resources and constitute an investment of a long-term nature.
Apart from the contractual relations described in this report, there exist no other ties between Netia and the persons managing or supervising Netia and the Seller of the aforementioned assets.

Extending the reach of Netia’s own infrastructure and customer base via acquisition and integration of such businesses is an important element of Netia’s strategy aimed at acquiring 1 million broadband customers.