NETC Announces a 75.4% Increase in Broadband Client Base in the 2Q07

SAO PAULO, Brazil, July 19  /PRNewswire-FirstCall/ -- Net Servicos de Comunicacao S.A. (Bovespa: NETC3 and NETC4; Nasdaq: NETC; and Latibex: XNET), announces today its 2Q07 results.

On May 16, 2007, the National Telecommunications Agency ("ANATEL") approved the acquisition of Vivax's control by Net Servicos pursuant to the terms and conditions in the Share Acquisition and Other Arrangement Agreement of October 2006. Following ANATEL's approval, shareholders' meetings approved this acquisition on June 11, 2007. Since then, Net has thus become Vivax's controlling shareholder, detaining the totality of its shares.

Vivax's acquisition was in line with the Company's growth strategy as the companies have complementary infrastructures with almost no overlapping. This becomes clear with the continued strong growth of both pay TV and broadband services, up by 16.7% and 75.4%, respectively. Voice services, which were only available in some parts of Net's coverage area, reached 353,700 clients at end of the quarter.

Vivax's consolidation required accounting equalizations in order to conform to the standards adopted by Net. Since, these adjustments are not recurring; the Company does not anticipate this kind of adjustment in the coming quarters. The effect of these adjustments on EBITDA totaled R$55.3 million.

Net revenue rose by 27.9%, from R$545.8 million in the 2Q06 to R$698.3 million in this quarter.

Operating costs rose by 30.2%, from R$254.8 million in the 2Q06 to R$331.7 million, remaining virtually stable as a percentage of net revenue, at approximately 47%.

Selling, General and Administrative expenses (SG&A) surged by 73.2%, from R$ 125.7 million to R$217.8 million.

Consolidated EBITDA excluding the non recurring equalization, rose by 24.3%, from R$157.4 million to R$195.8 million.

  Conference Call - TODAY

  English:
  11:00 AM (EST)
  Phone #: [phone]
  ID Code: 8967919

  Portuguese:
  10:00 AM (EST)
  Phone #: [phone]
  ID Code: Net Servicos

  Live Webcast and earnings release: http://www.ir.netservicos.com.br/



IR Contacts: Marcio Minoru (phone [phone] or e-mail: ); and Juliana Bajon (phone [phone] or e- mail: ) 

DATASOURCE: Net Servicos de Comunicacao S.A.



CONTACT:  IR, Marcio Minoru, [phone], ,

or Juliana Bajon, [phone], , both of

Net Servicos de Comunicacao S.A.



Web site:  http://www.ir.netservicos.com.br/ 

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