NETC Posts a 14% Increase in Pay TV Subscriber Base

SAO PAULO, Brazil, July 21  /PRNewswire-FirstCall/ -- Net Servicos de Comunicacao S.A. (Nasdaq: NETC; Bovespa: NETC3 and NETC4; and Latibex: XNET), the largest Pay-TV multi-service operator in Latin America offering bidirectional broadband internet access (Virtua) and voice services (Net Fone via Embratel) announces today its financial results for the second quarter of 2006 (2Q06).

Pay-TV and Broadband maintained the same growth pace as in 1Q06. Subscribers base increased by 14.0% and 110.0% year-over-year, respectively, as a result of the Company's ongoing policy of adopting aggressive sales practices and exploring existing opportunities in the market.

As a result of the organic growth, net revenue ended the quarter at R$ 466.2 million, 21.2% above the R$ 384.7 million posted in 2Q05. In the same period, Client ARPU grew by 12%, from R$ 107.78 to R$ 120.71, effect of the Company's strategy to increase penetration of Broadband subscribers over Pay-TV subscriber base.

Sticking to its subscriber expansion policy while keeping track of the return on this investment, the Company has been maintaining its EBITDA margin at around 27%. Consolidated EBITDA reached R$ 125.9 million, 10.3% up on the R$114.2 million recorded in 2Q05.

Net debt ended the quarter at R$ 392.5 million and the Net debt to EBITDA ratio remained at 0.85x. The Company's operations are generating sufficient cash to support the investments necessary for growth and to meet its financial obligations, thus permitting this low financial leverage.

Net income ended the quarter at R$ 21.8 million, reflecting the Company's healthy operating results and appropriate capital structure.

  Conference Call -- July 21, 2006
  In English:
  2 pm (EST)
  Phone #: [phone]
  ID Code: 7304439 or Net Servicos

  In Portuguese:
  11 am (EST)
  Phone #: [phone]
  ID Code: Net Servicos

  Live Webcast (audio): http://www.ir.netservicos.com.br/

  Full Release: http://www.ir.netservicos.com.br/



For additional information, please contact Net Servicos Investor Relations: Marcio Minoru (phone [phone] or e-mail: ) and Andre Carvalho (phone [phone] or e-mail: andre.carvalho @netservicos.com.br) 

DATASOURCE: NETC



CONTACT: Marcio Minoru, [phone], , or

Andre Carvalho, [phone], , both of

NETC



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

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