Netia TV subscribers in Poland up 56% in 2012 to 79,285

WARSAW, Poland — Netia SA (“Netia” or the “Company”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced its audited consolidated financial results for the full year and unaudited results for the quarter ended December 31, 2012.

Netia delivered RGUs ahead of guidance after net losses of fixed voice and broadband services slowed in Q4 2012 and TV service sales accelerated.

Netia’s TV services reached 79,285 at December 31, 2012, growing by 56% from 50,712 at December 31, 2011 and by 9% from 72,805 at September 30, 2012. Sequentially better net additions in Q4 2012 reflect incremental product, coverage and distribution improvements which should combine to accelerate further sales growth during the course of 2013.

Number of TV services (k)**

           Q1 11  Q2 11  Q3 11* Q4 11  Q1 12  Q2 12  Q3 12  Q4 12
           -----  -----  -----  -----  -----  -----  -----  -----
Old Netia    6.4    6.7    2.4    6.3
New Netia   45.8   48.8   46.4   50.7   61.8   71.3   72.8   79.3

* Netia disposed of Bydgoszcz based CATV operator in Q3 2011.

Netia added 6,480 TV services net in Q4 2012 as compared to 1,531 services added in Q3 2012. The sequential improvement in net additions reflects the sales of the smooth streaming-based TV, which is available over a wider footprint than IPTV and was introduced commercially in Q3 2012.

IPTV and content services

During 2011 Netia introduced a new TV offering ‘Telewizja Osobista’ (Personal Television). The offering includes a new proprietary set-top box – the ‘Netia Player’, which provides access to digital TV, both paid IPTV and free DTT (digital terrestrial TV), quick and easy access to popular internet services or own multimedia over a TV screen, and video-on-demand content libraries such as Ipla, Kinoplex and HBO GO.

Netia intends to constantly expand its TV offering with new content and functionalities. The product was further enhanced with new PVR functionality, and then by the introduction of a new content library ‘tvn player’ from April 2012.

In addition to IPTV based offerings, Netia is able to offer service outside its own network coverage using adaptive IP protocol. The IPTV technology currently used by Netia requires a fixed bandwidth transmission to deliver digital TV signal. Thanks to Microsoft Smooth Streaming technology, the new IP based TV combines high quality of TV signal with lower bandwidth requirements. Currently offering a narrower range of channels than IPTV in the form of the “Practical Package” TV offering, supplemented by DTT channels (thanks to the Netia Player’s DTT tuner functionality) and additionally offering video content libraries of such free-of-charge widgets installed on Netia Player as IPLA, TVN Player and Kinoplex.

** In order to ensure comparability of operating results, the actual key performance indicators for Q1-Q4 2012 are compared to the pro forma results for 1Q-3Q 2011 and the actual results for Q4 2011 for New Netia group including the results of Telefonia Dialog SA, Petrotel Sp. z o.o. and Avista Media Sp. z o.o. (currently merged into Telefonia Dialog SA) (the ‘Dialog Group’) and Crowley Data Poland Sp. z o.o. (‘Crowley’ , currently merged into Netia SA), which were acquired by Netia on December 16, 2011 and December 14, 2011, respectively.