Netia Continues Battle for Warsaw Tender

Business Wire, Nov 10, 1999

WARSAW, Poland--(BUSINESS WIRE)--November 10, 1999--

Netia Holdings SA (Nasdaq: NTIA), the largest alternative provider of fixed-line local telephone services in Poland, today announced that in the next few days it will bring a case to Poland's Supreme Administrative Court (NSA) concerning the denial of a license to Netia for the provision of telecom services in Warsaw and its suburbs. Netia will also file a motion with the NSA to block the execution of the decision of the Minister of Communications to grant the Warsaw license to El-Net.

On October 11, 1999, after considering the Netia motion, the Minister of Communications upheld his decision to award the license for the construction of a telecommunications network and provision of telecom services in Warsaw and suburbs to El-Net. In his justification, the Minister conceded that El-Net's tender documentation included content-related faults, but he would not consider them in making his final decision.

In its motion to reconsider the case, Netia pointed out over thirty content-related and legal faults in the documentation submitted by El-Net. It was emphasized, among other points, that in the tender procedure El-Net was given additional opportunities to present its offer, which contradicted the equality of parties principle. Moreover, during the second stage of the bidding process El-Net included in its documentation information about the value of their financial offer, which was forbidden by the tender regulations and should have resulted in the exclusion of El-Net from the tender. Nevertheless, all these issues were deemed by the Minister of Communications to be unimportant and insufficient to change his decision.

In filing its complaint with the NSA, Netia requests immediate restraint on the execution of the ministerial decision, which in effect means freezing El-Net's operations on the construction of the telecom network in Warsaw.

NETIA HOLDINGS is the largest alternative fixed-line telecommunications operator in Poland, with 23 licenses for local telecommunications services in territories covering some 13 million people, or approximately 33% of the Polish population. The Company's local telephone license territories cover six of the country's ten largest urban areas including Krakow, Poznan, Gdansk, Lublin, Katowice, Opole and several territories surrounding the city of Warsaw. Netia has also secured the benefit of a data and IP license to provide data transmission and internet-based services nationally.