Current reports

WARSAW, Poland – May 5, 2004 – Netia SA (“Netia” or the “Company”) (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services, informed that on May 4, 2004, it received a statement of claim filed with the High Court of Justice, London, the United Kingdom (Claim No. 2004 Folio No. 188) by Merrill Lynch Capital Services, Inc („Merrill Lynch”) against the Company, Netia Telekom SA (“Telekom”) and Netia Holdings SA for the payment of USD 8,675,549 (in words: eight million, six hundred and seventy-five thousand, five hundred and forty-nine US dollars), together with accrued interest and legal fees, due in connection with the termination of a swap transaction on December 14, 2001 (see press release dated December 14, 2001) which had been executed between Telekom and Merrill Lynch on March 30, 2001 (see press release dated March 30, 2001). The Company’s Management Board is of the opinion that the above mentioned claim is groundless because it is in contravention of the completed restructuring of the obligations of the Netia Group companies, and the receivable in question was subject to reduction and was divided into installments with a delayed payment deadline pursuant to the provisions of the arrangements adopted with respect to the Company on June 28, 2002, and to Telekom on June 24, 2002 (see press releases dated June 28, 2002, and June 25, 2002, respectively). The amount in question has been recognized in Company’s accounts accordingly at discounted value of future obligation and as at March 31, 2004 amounted to PLN 2,977 thousand.

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 Netia's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F filed with the Commission on June 27, 2003, as well as Current Reports on Form 6-K it has furnished to the Commission since filing its Annual Report. Netia undertakes no obligation to publicly update or revise any forward-looking statements.