NETC Announces Reverse Split

NETC Announces Reverse Split

SAO PAULO, Brazil, July 17 /PRNewswire-FirstCall/ -- Net Servicos de Comunicacao S.A. (Nasdaq: NETC; Bovespa: NETC4 and NETC3; and Latibex: XNET) the largest Pay-TV multi-service operator in Latin America, and an important provider of bi-directional broadband Internet access (Virtua), announces that at the Extraordinary General Meeting, held on April 28th, 2006, the shareholders approved the reverse split of each lot of fifteen shares to one share.

In conjunction with the reverse split on the preferred shares, the ADR ratio will be changed from one ADR to ten preferred shares to a new ratio of one ADR to one preferred share. Also, the units traded at Latibex ("trading unit") ratio will be changed from one trading unit to ten preferred shares to a new ratio of one trading unit to one preferred share. The effective date of the ratio change is expected to be August 1, 2006.

As a result of the events mentioned above, registered holders of ADR certificates will be required to exchange their existing ADSs for new ADSs on the basis of two new ADSs for every three ADSs surrendered, effective August 1, 2006. JPMorgan, as Depositary, expects to be in a position to distribute the new ADSs to DTC on or around August 4, 2006. JPMorgan's issuance and cancellation books will be closed from the close of business July 28, 2006 until the close of business August 4, 2006.

If the aggregate number of ADSs or trading unit to which a holder is entitled results in a fractional ADS or trading unit, such fractions will be sold, if possible, and the net proceeds, if any, will be distributed to such holder.

NET's total shares will be of 267,987,468 shares, out of which 109,320,070 nominative common shares and 158,667,398 nominative preferred shares, after the reverse split.

Source: Net Servicos de Comunicacao S.A.

CONTACT: Net Servicos Investor Relations: Marcio Minoru,
+5511-2111-2811, minoru@netservicos.com.br, or Andre Carvalho,
+5511-2111-2983, andre.carvalho@netservicos.com.br

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