Globalstar Reports Results For Fourth Quarter And Full Year 2001.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 16, 2002

Globalstar, the global mobile satellite telephone service provider, today released its results for the fourth quarter and full year ending December 31, 2001.

During the fourth quarter, the company saw continued growth in service usage among maritime and other vertical industries, though overall usage declined largely due to seasonal fluctuations. The estimated number of mobile and fixed Globalstar subscribers rose to 66,000 at the end of 2001, an increase of 12% from the previous quarter.

Globalstar L.P.'s net loss applicable to ordinary partnership interests increased to $184 million in the fourth quarter of 2001, compared with a net loss of $129 million in the third quarter. The increased loss was due principally to one-time costs relating to restructuring and other activities.

All Globalstar gateways remain in operation, processing all calls as usual, and the company plans to further expand service coverage in the future. In the year 2001, the company introduced service across Turkey, Central Asia, and previously unserved portions of the Middle East and Brazil, and it also expanded coverage across several maritime areas, including portions of the Pacific Ocean between Korea, Japan and Taiwan, as well as across the Tasman Sea and the Caribbean.

"Globalstar continues to provide reliable, high-quality satellite phone service," said Olof Lundberg, chairman and CEO of Globalstar. "With our reorganization filing in February, our restructuring has now begun in earnest. We have achieved several initial milestones, including granting of our first day motions, and we remain committed to completing this work within this year. We look forward to emerging from the restructuring process as a new, vibrant company.

"At the same time, our regular business is not standing still. While the restructuring goes on, we are expanding into new geographic regions, and we are developing and introducing new products and services. Once our restructuring is complete, including fully consolidating some gateway operations and implementing new marketing and pricing plans, we expect the pace of market penetration and sales to increase substantially."

Financial Results

A full discussion of Globalstar's financial performance for the fourth quarter and full year can be found in the company's Annual Report on Form 10-K, to be filed shortly with the U.S. Securities and Exchange Commission. Highlights are as follows:

-        For the full year 2001, Globalstar recorded a 260% increase
         of minutes of use (MOUs) to 23.9 million from 6.6 million in
         2000. The company recorded a total of 7.0 million MOUs,
         including both mobile and fixed service, in the fourth
         quarter, representing a 6% decrease in traffic over the
         previous quarter. Much of this decline was due to a slowdown
         in usage during the year-end holiday period, a trend that was
         noted during the same period in 2000.

-        For the full year 2001, total revenues increased 75% to $6.4
         million. Total revenue increased to $1.6 million in the
         fourth quarter, up from $1.5 million in the third quarter,
         largely reflecting Globalstar acquisition of the majority
         interest in the Canadian service provider operation in
         mid-December.

-        Globalstar took extensive measures throughout 2001 to reduce
         operating costs, including an overall reduction in headcount.
         As had been announced earlier, headcount was reduced from 439
         at the beginning of the year to 124 by year-end. Globalstar
         ended the year with $55.6 million cash on hand, and at the
         time of Globalstar's bankruptcy filing, February 15, 2002,
         the company had approximately $46 million in cash.

-        Globalstar, L.P. (GLP) reported a net loss applicable to
         ordinary partnership interests for the quarter of $184
         million, compared with the previous quarter's loss of $129
         million, and a loss of $602 million for the full year,
         compared with a loss of $3.8 billion in 2000, which reflected
         a one-time $2.9 billion write-down of company assets. The
         current quarter's loss is equivalent to $2.82 per partnership
         interest, which converts to a loss of $0.50 per share of
         Globalstar Telecommunications Limited (GTL). For the full
         year, GLP's loss is equivalent to $9.26 per partnership
         interest, for a loss of $1.54 per share of GTL.

Restructuring Plan

In mid-February 2002, Globalstar filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware, and the company is continuing to work with its creditors and the court to finalize a formal business plan aimed at restructuring the company's finances and allowing the newly organized company to successfully emerge from the Chapter 11 process. Globalstar expects to submit this business plan to the Court during the second quarter of 2002, and, assuming the plan is accepted, the company intends to emerge from the bankruptcy process as rapidly as possible.

Under this plan, Globalstar believes it can achieve cash flow breakeven with less additional funding than would have been required under the company's earlier business model. The company is currently in discussions with a number of potential investors to meet this requirement.

Sales and Marketing Operations

In the fourth quarter, Globalstar saw a drop in overall usage in part due to year-end holidays when many business users slowed their operations. Nevertheless, the company has continued to add subscribers in several key markets. In South Korea, for example, Globalstar's local service provider, Dacom, has seen a substantial rise in call traffic due to an increased focus on the commercial maritime market. Dacom is also in discussion with Japanese regulatory authorities to introduce Globalstar service in that country.

Mr. Lundberg said, "While we continue to see strong interest in Globalstar service around the world, in late 2001 many potential customers indicated to us that they were holding back on purchase decisions until our financial picture becomes more clear. Now that we have initiated the formal restructuring process, we have started the process of rebuilding."

In the fourth quarter of 2001, the company achieved several new milestones in the area of sales and marketing, including:

-    Globalstar's service provider in Italy, Elsacom, announced that
     Globalstar fixed maritime phone units were being installed on all
     major vessels across the entire fleet of the Italian Navy.

-    Roaming agreements continued to be implemented between gateway
     operators, bringing the overall system close to ensuring true
     universal roaming anywhere that Globalstar service is available.
     Customers today can generally roam from their home location to
     most other major geographic areas, and full universal roaming is
     expected to be a feature of the new business plan now under
     development as part of Globalstar's restructuring.

-    Data software was introduced in Telit phones, making data
     services available for the first time from a Globalstar/GSM
     handset. Data services have been available over the Qualcomm
     GSP-1600 handset, used in CDMA/AMPS markets, since late 2000. In
     early 2002, Sea Tel, a major maritime telecommunications vendor,
     introduced the MCM-3, a 28.8 kbps terminal for use with the
     Globalstar system, and AeroAstro, a producer of small satellites
     and related technology, has begun development with Globalstar of
     a very small simplex modem for use in remote sensing and asset
     tracking applications.

-    Usage of Globalstar service across maritime industries and
     seagoing naval vessels continued to climb, and in the fourth
     quarter this sector represented nearly 20% of Globalstar's
     service revenue. This confirms the very high utility of the
     Globalstar service to this important market segment, at an
     extremely competitive price.

-    Interest in Globalstar service continued to grow for public
     safety. In late 2001, Globalstar signed a contract to provide
     1,500 phones to the National Communications Service, an agency
     within the executive branch of the U.S. Government responsible
     for emergency telecommunications preparedness. Many of the phones
     are already in use, and recently served as a backup
     communications network for law enforcement and security officials
     during the 2002 Winter Olympics.

-    In the fourth quarter, Qualcomm held a number of public
     demonstrations of its MDSS Globalstar communications system,
     which can provide high-capacity data, voice and video
     communications to and from commercial aircraft for security and
     avionics applications.

-    In late 2001, Globalstar acquired the equity stakes in
     Globalstar's Canadian service operations previously owned by
     Vodafone Group Plc., and steps are being taken to acquire further
     equity in these operations from Loral Space & Communications.
     Globalstar is also in the process of acquiring from Vodafone full
     ownership of Globalstar USA and Globalstar Caribbean, subject to
     FCC and other regulatory approvals. These steps are part of the
     company's overall strategy of consolidating operations in key
     markets to provide greater integration and control over sales and
     marketing activities.

System Update

The satellite constellation continues to perform well with high rates of call retention and call completion. Over the past 13 months, seven of the company's 48 operational satellites experienced anomalies and were taken out of service. However, three of the satellites rapidly recovered and two more are showing signs of recovery. Only two satellites have been declared failed, and they have been replaced by two on-orbit spares. A third on-orbit spare was put into service pending recovery work of one anomalous satellite.

As a result, by the end of April, the Globalstar constellation will have 47 satellites in operation with one on-orbit spare, and the company continues to work toward the recovery of the two remaining satellites. Meanwhile, in spite of these anomalies, service availability has been at 97.92%, with services interruptions of only a few minutes per day and generally only in lower and higher latitudes. With one or possibly more spares available, the company expects to eventually restore the constellation to its full 48-satellite configuration, eliminating service outages completely.

Globalstar is a provider of global mobile satellite telecommunications services, offering both voice and data services from virtually anywhere in over 100 countries around the world. 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 with acceptable terms under credit facilities or from other sources, the ability to attract new investors to fund continued operations, the ability to restructure our debt, the risk of 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.