Netservices Share Price!

The Company has noted the sharp fall in the Company's share price today. The financial year end of NetServices is 31 August. The Board is currently evaluating the performance for the year, in the light of information still being received. In particular, the Board is reviewing the Company's exposure to its business customers in the wholesale broadband market, a market which remains in a state of flux. Consequently whilst the final outcome for the year is still undetermined it is likely that the loss for the year will significantly exceed market expectations. A post year end trading update will be released at the earliest opportunity.

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NetServices is now looking to sell its wholesale broadband business so it can focus on other Internet services.

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Due to a number on ongoing contractual issues NetServices are disconnecting a number of our ISP customers. This will result in loss of service to their customers typically consumers of broadband. If you are experiencing problems of this nature there are a number of options open to you:

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The EBITDA loss referred to above includes an exceptional bad debt charge in
respect of wholesale resellers of approximately £750k (2005: £111k). £225k of
this was included in our half year results announced in May. The 'free'
broadband season arising immediately after our IPO has destroyed more reseller
businesses than anyone in the sector appears to have anticipated, ourselves
included. We believe there may be scope for recovery of some of the bad debt
provisions in the future but cannot place reliance or expectation on this at
this time.

Furthermore during the year our wholesale business consumed a disproportionate
amount of management resource. Following the restructuring and the introduction
of new approaches to credit and fair usage of the network we are now confident
that it is now generating a positive contribution and cash flow to the Group.
However we continue to explore the strategic options available to us as the
provision of content and solutions via DSL begins to take shape in the market

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NetServices (AIM:NSV) the specialist provider of voice and data converged
business infrastructure solutions announces that it has today terminated its
contract with Biscit csp Limited (formerly v21.co.uk ltd) ('Biscit'), one of the
Company's resellers. NetServices provided broadband DSL services to
approximately 9,500 end users via Biscit. Biscit was acquired by Biscit Internet
Limited in early October 2006. Since then NetServices has been unable to obtain
satisfactory comfort over the financial position of either Biscit or its parent
company and has taken this action which will affect end users.

However, in order to provide end users with continuous supply and internet
access, NetServices has maintained its lines open and has directed end users to
an alternative NetServices supplier's web page with whom they can sign up
immediately.

NetServices expects the alternative supplier option will not materially impact
current trading performance and it does not expect that this will affect its
result for the year ended 31 August 2006 referred to in its pre- close trading
statement made on 13 September 2006. NetServices will provide a further update
on progress when it announces its preliminary results for the year ended 31
August 2006 on 23 November 2006.

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