Globalstar Reports Fourth Quarter and Year-End Results.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 2, 2001

Data services introduced commercially;

Work continues on developing financing initiatives for the future

Globalstar (NASDAQ:GSTRF), the global mobile satellite telephone service, today announced operating and financial results for the fourth quarter and year ended December 31, 2000, which showed continued minimal growth in voice traffic but also initial customer acceptance of new data services. The company also reported that it has taken a $2.9 billion non-cash charge related to the carrying value of the Globalstar system.

The company continued to roll out its operations throughout the fourth quarter and into 2001, opening new gateways and introducing both voice and data service in new markets. Globalstar ended the year 2000 with approximately $197 million in cash on hand, which the company believes to be sufficient to continue its operations through 2001, and it is continuing to meet its obligations to its employees, customers, and trade suppliers in the normal course.

Globalstar recorded a total of 2.6 million minutes of use (MOUs), including

both mobile and fixed service, in the fourth quarter, only slightly higher than usage recorded in the third quarter due in part to slower use during the year-end holidays. However, usage rebounded in the first few weeks of 2001, and MOU's for the first quarter of this year are expected to be roughly 50% higher than the fourth quarter of 2000. Furthermore, in the final week of March, the company recorded over 394,000 MOUs, a rate that is 66% higher than the highest traffic week in 2000. The estimated number of mobile and fixed subscribers at the end of 2000 was 30,583. The mobile and fixed subscriber total as of March 18, 2001, was 40,009.

As in past quarters, growth in MOUs continued to be most rapid in large geographic areas that have inadequate or non-existent cellular network coverage. Brazil, Canada, Russia and Australia remain large, growing markets, and Saudi Arabia, which just initiated service in mid-September, has quickly become Globalstar's fourth largest country operation. In early 2001 when a new Brazilian gateway opened in the heart of the Amazon Basin, Brazilian MOUs jumped substantially, further demonstrating the value of Globalstar service in remote regions.

"Vertical industries such as transportation, maritime and natural resource exploration represent significant opportunities for us in terms of high-subscriber, high-usage customers, and we are working with our service providers to redirect efforts and resources towards these potential customers," said Tony Navarra, president of Globalstar. "Furthermore, the early response we have seen to the introduction of data services has encouraged us to put more focus on this area as well."

"We also continue to see growing acceptance of our service as time goes on," Mr. Navarra added. "For example, in Brazil where the vast landmass and very limited or uneven cellular coverage create an ideal market for Globalstar, we are just now starting to see acceleration in minutes-of-use. Though we still have far to go, the demand for our service is indeed there, but requires more time to tap than we had originally projected."

Globalstar has retained The Blackstone Group to assist the company in developing initiatives as the company moves forward, including restructuring Globalstar's debt, identifying funding opportunities and pursuing other strategic alternatives. Blackstone recently presented a preliminary set of analyses and recommendations, and the Globalstar partners are now reviewing and evaluating a number of possible steps to adjust and improve the company's business plan and operating strategies.

Financial Results

A full discussion of Globalstar's financial performance for the fourth quarter and for the full year 2000 can be found in the company's 10K report, which was filed today with the U.S. Securities and Exchange Commission. Highlights are as follows:

In the fourth quarter, Globalstar recorded a $2.9 billion non-cash impairment charge related to the $3.2 billion carrying value of the Globalstar system, including spare satellites, unsold equipment and other assets. This charge resulted from the company's revision of estimated gross cash flows through 2009, which is the estimated useful life of the Globalstar satellite system.

Gross service revenue for the fourth quarter was $1.1 million and net revenue, including royalty income from phone sales and less discounts and promotions, was also $1.1 million. Both were essentially flat compared to gross and net revenues in the third quarter, due in large part to the slowdown of usage during year-end holidays and lower royalty income. Growth in revenue resumed in the early part of 2001.

For the full year, gross service revenue was $2.8 million, and net revenue was $3.7 million.

The impairment charge, combined with operating losses and other expenses, resulted in a total net loss of $3.8 billion for the year. The portion of this loss that is applicable to Globalstar Telecommunications Ltd (GTL) is $2.1 billion or $20.85 per common share of GTL.

As announced in January, in order to have sufficient funds available to pursue continued progress in its marketing and service activities, Globalstar has suspended indefinitely principal and interest payments on all of its funded debt, including its credit facility, vendor financing agreements and Senior Notes, as well as dividend payments on its preferred stock. The suspension of these payments will reduce the company's payments by approximately $400 million for the year 2001. However, as a result of these actions, defaults have occurred with respect to some of Globalstar's debt.

Globalstar's marketing and service rollout activities are continuing uninterrupted, and the company, including its service provider partners, remains committed to maintaining and expanding its operations.

Operating and Marketing Initiatives

With sufficient cash to continue its operations through 2001, Globalstar is taking several steps to broaden and strengthen its business and marketing operations. These steps include the following:

Introduction and expansion of data applications: Globalstar is continuing its introduction of data services, which began in late 2000 in the U.S., Canada and the Caribbean where preliminary sales results have been very strong. In late March, SCADA (Supervisory Control and Data Acquisition) data modem service was also introduced in North America, offering an attractive data transmission capability which can be used for monitoring the status of pipelines, transmission lines and other industrial operations in remote locations. The company is continuing to work with outside companies to develop further specialized equipment for aviation, maritime, and other potential data markets.

Expansion of service in new country markets: At year-end 2000, Globalstar's network of 23 gateways offered service coverage across 102 countries. With the recent addition of two more gateways in Ogulbey, Turkey, and Manaus, Brazil, Globalstar service coverage now reaches 109 countries or over 75% of the world's land areas, including total coverage of both North and South America from the southern tip of Chile and Argentina to the northern fringes of Canada and Alaska.

Extension of coverage in maritime areas: Because the Globalstar system has performed even better than original design specifications predicted, the company has been able to extend the coverage of many gateways to bring service to new offshore and mid-ocean regions, further increasing the value of this service to maritime users. In addition to the wide areas across the North Atlantic and northeast Pacific announced last year, new service areas have been opened up including the Caribbean; the Tasman Sea between Australia and New Zealand; and the Sea of Japan between Korea and Japan.

Globalstar service providers continue to develop new, more aggressive marketing and pricing programs, with especially flexible terms for high-volume business users. In the fourth quarter, these were supported by a highly visible U.S. advertising campaign which appeared on TV, radio, and print media, and in the first quarter large numbers of display ads were placed in and around major U.S. airports. Service providers saw a significant increase in sales activity in response to these efforts.

In early 2001, new pricing programs were introduced, including Globalstar USA's "Personal Reach" program, offering minutes of use for as low as $0.89 for high-volume users. Globalstar Canada also introduced a two-month campaign with pricing packages that included a waiver of connection fees and 50 free minutes a month for two months.

Installation of fixed phones continued to grow, with phones installed on public intercity buses in Brazil, remote communities across Central America and Morocco, and along highways in Argentina. At a single mining operation in Honduras, five fixed phones are each generating several thousand minutes of use per week.

In early 2001, Globalstar signed a memorandum of understanding with SeaTel, a major provider of maritime telecommunications equipment and services, under which SeaTel will develop a new marine antenna kit for Globalstar Qualcomm phones. Prototype units have already been produced, and commercial sales are expected to begin in the second quarter of 2001.

Globalstar service also continues to serve a critical role in rescue operations around the world. Use of Globalstar phones have been credited with saving lives in the wake of recent earthquakes in El Salvador and in rescue work by the Royal Canadian Mounted Police.

System Update

The 52-satellite Globalstar constellation has completed a year of operation, and all parts of the system continue to operate well. Users continue to report call quality and retention at some of the highest levels in the wireless telecommunications world.

Roaming capabilities across the system continue to expand, furthering Globalstar's reach as a truly worldwide telephone service. Full roaming is available both ways between the U.S. and most parts of Europe, and recent roaming agreements now allow for service to and from South America, Australia and Asia.

Globalstar is a partnership of the world's leading telecommunications service providers and equipment manufacturers, including co-founders Loral Space & Communications and Qualcomm Incorporated; Alenia; China Telecom (HK); DACOM; DaimlerChrysler Aerospace; Elsacom (a Finmeccanica Company); Hyundai; TE.SA.M (a France Telecom/Alcatel company); Space Systems/Loral; and Vodafone Group Plc. For more information, visit Globalstar's web site at www.globalstar.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements provide our expectations or forecasts of future events. Actual results could differ materially as a result of known or unknown risks and uncertainties and other factors, including our ability to secure sufficient funding under credit facilities or from other sources, to restructure our debt, the acceleration of existing debt facilities and the exercise of remedies with respect thereto, and other risks, uncertainties and factors disclosed in the most recent report on Form 10-K and reports on Form 10-Q and Forms 8-K of Globalstar Telecommunications Ltd. and Globalstar, L.P. filed with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statement.