NETC announces today its results for the fourth quarter of 2007

São Paulo — Net Serviços de Comunicação S.A. (Bovespa: NETC3 and NETC4; Nasdaq: NETC; and Latibex: XNET), announces today its results for the fourth quarter of 2007 (“4Q07”) and fiscal year 2007.

The pay TV subscriber base reached 2,475,000 at the end of 2007, expanding by 16% from 2,142,000 subscribers in the previous year; the broadband subscriber base increased to 1,424,000, growing by 65% from 864,000; and the voice subscriber base totaled 567,000, expanding by 212% (all figures in relation to year end 2006).

                                                            Var.
Operating Highlights                      4Q07   4Q06  4Q07x4Q06

Homes Passed (thousand)                  9,042  8,408         8%
Bidirectional Homes Passed (thousand)    6,448  4,151        55%
Digital Homes Passed (thousand)          7,275  4,106        77%
Pay TV Client base (thousand)
  Connected Clients                      2,475  2,142        16%
  Penetration over Homes Passed            27%    25%          - 
  Churn Rate - last 12 months              15%    14%          -
Digital Video Client Base (thousand)
  Connected Clients                        604    181       234%
  Penetration over Homes Passed             8%     4%          -

Net Revenue climbed by 28.0% to R$ 2,901.9 million, compared with R$ 2,266.7 million in 2006. Average Revenue per User (ARPU) grew 9% in the year to R$ 131.34, from R$ 120.51 in 2006. The main drivers of these increases were the growth in the subscriber base and the Company´s ability to sell to its clients not only more products, but also products with higher value added.

Operating Costs in 2007 stood at R$ 1,379.7 million, growing by 30.7% in relation the R$ 1,056.0 million recorded the year before. Programming Costs increased by 20.1% in the year, mainly due to the higher number of Pay TV subscribers, while Other Operating Costs, comprised mainly of costs with the call center and the contracting of bandwidth for Internet service (link), rose by 75.9% in the period.

Selling, general and administrative expenses (SG&A) totaled R$ 735.6 million in 2007, 35.9% higher than the R$ 541.4 million recorded in 2006. Selling Expenses were up 23.5%, driven by higher expenses with sales commissions because of the higher sales volume in the year, as well as higher expenses with advertising campaigns. General and Administrative Expenses increased by 17.4%.

Consolidated EBITDA was R$ 804.3 million in 2007, up 25.9% in relation to the R$ 638.7 million reported in 2006. EBITDA margin remained stable at 28%, within the range considered adequate by the company, given the Company’s execution of a strategy of strong organic growth in a highly competitive scenario.