Current reports

WARSAW, Poland – May 20, 2004 – Netia SA (“Netia” or the “Company”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services announced that RST El-Net SA (“El-Net”), its subsidiary, received today a decision of the Warsaw District Court, dated May 14, 2004, registering an increase in El-Net’s share capital of PLN 90,000,000. The new shares were subscribed for in a private subscription by Netia Ventures Sp. z o.o. (“NV”), Netia’s subsidiary, solely. The new shares were paid in cash pursuant to contractual offset of NV’s receivables from El-Net in the amount of PLN 551,016,000. Following the share capital increase, El-Net’s issued share capital is PLN 400,000,000 and represents 4,000,000 shares, PLN 100 par value per share, each share giving the right to one vote at El-Net’s general meeting of shareholders. In addition, simultaneously with the registration of the increase in El-Net’s share capital, PLN 309,001,425.42 of NV’s receivables from El-Net were cancelled. Following the above, the total amount of NV’s receivables from El-Net is PLN 124,361,432.02.

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.