American Mobile Reports Second Quarter 1999 Financial Results.

RESTON, Va.--(BUSINESS WIRE)--July 26, 1999--

American Mobile Satellite Corporation (NASDAQ:SKYC) today announced financial results for the second quarter ending June 30, 1999. Total revenues for the quarter, including equipment sales, increased 2% to $22.9 million from $22.4 million for the same period in 1998. Net service revenues for the quarter were $16.6 million compared with $16.7 million in the second quarter 1998. The company reported a second quarter EBITDA loss of ($10.5) million and a net loss of ($42.4) million, or ($1.31) per share, as compared to an EBITDA loss of ($10.4) million and a net loss of ($39.0) million, or ($1.23) per share, for the same quarter of the previous year. Excluding equity losses in XM Satellite Radio, which the company was required to reflect under the equity basis of accounting as a result of the July 7, 1999 XM transactions, the net loss for the second quarter was ($39.2) million, or ($1.21) per share.

Total revenue, service revenue and EBITDA for the quarter, all represented sequential improvements over the first quarter 1999 results. The year over year

change in service revenue was impacted by the fourth quarter 1998 sale of the company's maritime voice business, and the resulting wholesale revenue stream from that market segment.

American Mobile achieved record subscriber growth during the quarter, adding 10,100 units, ending at 123,100 at June 30, 1999.

"The second quarter results include the successful beginning of many of our key initiatives," said Walter V. Purnell, Jr., president and CEO of American Mobile. "While the timing of our initial UPS roll-out affected revenue per user, this major launch effort was the key driver behind our record subscriber growth. However, beyond UPS we posted increased growth in virtually every product category and showed particularly strong performance in our multi-mode and voice products."

During the second quarter a number of significant business initiatives were announced by American Mobile, including the following:

-- A strategic alliance with SkyTel Communications to pursue joint opportunities in the wireless data market. (April 7)

-- Debuted eLink(sm) wireless email service. In addition to delivering interactive, two-way communications, the product is the first to provide mobile professionals with integrated wireless access to a broad range of corporate and Internet email and personal information management (PIM) applications. (May 4)

-- A five-year contract extension with AT&T for satellite dispatch and wireless telephone communications services. (May 24)

-- Announced the acquisition of the remaining minority interest in XM Satellite Radio from Worldspace, Inc. in exchange for 8.6 million shares of American Mobile stock. Simultaneously, XM Satellite Radio announced a $250 million investment commitment by industry leaders General Motors, DirecTV, Clear Channel Communications, and a group of financial investors. XM also announced a long-term supply and distribution agreement with GM. (June 8)

- An agreement with Southeastern Freight Lines, Inc. to equip their entire 2,000-truck fleet with mobile messaging services. (June 8)

-- The initial roll-out of the multi-year contract with UPS to provide wireless data communications in support of their new generation package tracking device, DIAD III. American Mobile's ARDIS(R) network allows UPS delivery personnel to transmit real-time package information to the company's TotalTrack package tracking system. (June 14)

-- An agreement with ACS to provide wireless data solutions to enhance the servicing of 7,000 ATM machines. (June 22)

Added Purnell, "Our substantial list of second quarter operational accomplishments and significant strategic developments places American Mobile in an enhanced position to further expand and leverage our core strengths."

American Mobile Satellite Corporation will hold its second quarter conference call on Tuesday August 3rd, 1999 at 11am EDT. To participate please dial:

[phone]

or

[phone]

The playback number for the call is [phone] or [phone]. The playback pass code is: 1761927.

About American Mobile

American Mobile (www.AmMobile.com) owns and operates an integrated terrestrial/satellite network and provides a wide range of mobile communication services, including digital voice dispatch, data communications, dual-mode mobile messaging, position reporting services, and satellite telephone to the continental United States, Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, and hundreds of miles of U.S. coastal waters. American Mobile services are used in the transportation, field service, maritime, emergency services, and telemetry markets, and with eLink(sm) in the two-way wireless email market.

Factors that could cause forward-looking statements in this news release to differ materially from actual results are discussed in American Mobile Satellite Corporation's Form 10K for the year ended December 31, 1998, and other periodic filings the company has made with the Securities and Exchange Commission. Copies of the filings are available upon request from American Mobile Satellite Corporation's Investor Relations Department. -0-

                 AMERICAN MOBILE SATELLITE CORPORATION
                         FINANCIAL HIGHLIGHTS
               (in thousands, except per share amounts)
                              (unaudited)

Income Statement Data       Three Months Ended       Six Months Ended
                                 June 30,                June 30,
                              1999       1998       1999         1998

Total revenues           $ 22,873    $ 22,410    $ 43,103    $ 32,432
Service revenues         $ 16,622    $ 16,670    $ 32,786    $ 23,088
Revenue from
 Equipment Sales         $  6,251    $  5,740    $ 10,317    $  9,344
Cost of service
 and operations          $ 16,516    $ 16,918    $ 34,386    $ 24,646
Cost of
 equipment sold          $  6,594    $  5,415    $ 11,122    $  9,296
Sales and
 advertising             $  5,721    $  4,711    $ 10,470    $  7,733
General and
 administrative          $  4,591    $  5,773    $  9,360    $  9,404
Depreciation and
 amortization            $ 13,632    $ 14,457    $ 27,404    $ 24,620
EBITDA                   ($10,549)   ($10,407)   ($22,235)   ($18,647)
Net Loss                 ($42,377)   ($38,963)   ($85,520)   ($64,205)
Net Loss per share       ($  1.31)   ($  1.23)   ($  2.65)   ($  2.25)
Net Loss excluding
 equity loss
 from XM Radio           ($39,179)       --      ($78,828)         --
Net Loss per share
 excluding loss
 from XM Radio           ($  1.21)       --      ($  2.44)         --
Weighted average
 shares outstanding        32,416      31,719      32,321      28,502


Balance Sheet Data                      Jun. 30, 1999    Dec. 31, 1998

Cash and
 cash equivalents                          $   1,314        $   2,285
Total assets                               $ 464,852        $ 489,794
Debt and capital leases
 (incl. current portions)                  $ 526,995        $ 477,672
Stockholders' deficit                      ($115,238)       ($ 37,023)

Subscribers by Market
 Segment - as of:      6/30/98   9/30/98  12/31/98   3/31/99   6/30/99
Field Service                        48%       47%       44%       41%
Transportation                       26%       27%       31%       33%
Telemetry                            10%       10%       10%       10%
Maritime                              3%        3%        3%        4%
Other                                13%       13%       12%       12%

Subscribers by Product
 Type - as of:      6/30/98    9/30/98   12/31/98   3/31/99    6/30/99

Voice               11,600     12,400     13,000     13,400     14,500
Data                80,100     89,100     92,700     99,600    108,600
Total               91,700    101,500    105,700    113,000    123,100

Average Revenue Per
Subscriber Per Month   2Q97 3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99

Voice                  $123 $121 $108 $110 $113 $117 $101 $ 85 $ 81
Data (pro forma
 number includes
 ARDIS subscribers
 prior                                     $ 51 $ 52 $ 49 $ 44 $ 41
 to acquisition)