Globalstar Reports Results for Third Quarter of 2002.

Business/High Tech Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 14, 2002

Globalstar

Revenues Continue to Grow as Subscribers and Usage Increase

Company Achieves Milestones in New Product and Technology Development

Globalstar, the world's most popular handheld satellite telephone service, today announced its results for the quarter ended September 30, 2002.

Both revenue and subscriber numbers continued to climb during the quarter, accompanied by significant progress in consolidation of international operations, expense reduction, and new product development.

On August 19, the company acquired the sales and technical operations of Globalstar USA (GUSA), the Globalstar service provider in the United States. As a result, financial figures from August 20 forward include revenues and expenses which previously accrued to Vodafone Group Plc, GUSA's previous owner. Figures given for prior quarters do not include GUSA revenues and expenses.

For the quarter, Globalstar L.P.'s net loss applicable to ordinary partnership interests declined to $14.6 million, a reduction of 31% from the previous quarter and a decline of 89% from the same quarter in 2001. Third quarter operating losses were $14.7 million, a decline of 30% from the previous quarter and a decline of 46% from the third quarter of 2001. These results are consistent with the company's expectations during this restructuring period.

Globalstar recorded a total of 10.1 million minutes of use in the third quarter, representing a 31% increase in traffic from the previous quarter and a 36% increase from a year ago. The estimated number of mobile and fixed subscribers at the end of September was 80,000, an increase of 6% over the previous quarter and a 37% increase from a year ago.

"This quarter included some crucial developments in our restructuring, most notably the completion of our acquisition of Globalstar sales and marketing operations across North America and parts of Europe," said Olof Lundberg, chairman and CEO of Globalstar. "This has already resulted in a dramatic improvement in our revenue stream, and we were able to rapidly consolidate these operations while still reducing monthly cash requirements.

"Meanwhile, our business continues to branch out into new areas and new markets, supported by a growing portfolio of products and services. We are also currently in advanced discussion with possible investors, and we expect to have an announcement on this in the weeks ahead, clearing away the last remaining obstacle to completing our reorganization and to the rapid, successful growth of our business."

Financial Results

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

Total revenues for the third quarter of 2002 were $7.8 million, a 66% increase over the second quarter, and a 434% increase over the same quarter in 2001. Service revenues for the third quarter were $5.7 million, up 73% over the previous quarter and up 292% over the third quarter of 2001. The company also recorded $2.1 million of equipment sales revenue from the sale of handsets and related equipment in the United States and Canada.

As of September 30, 2002, Globalstar had approximately $22.6 million in cash on hand. The company is currently in discussions with potential investors, with the objective of raising sufficient funds to achieve cash flow breakeven operations, although the outcome of these discussions cannot be assured at this time. Globalstar expects that debtor-in-possession financing will likely be required to sustain operations through the completion of its chapter 11 case.

Globalstar, L.P.'s $14.6 million loss for the quarter converts to a loss of $0.12 per share of Globalstar Telecommunications Ltd.

Company Operations

During the third quarter, Globalstar achieved several milestones in the areas of acquisitions, product development and new applications. These included:

-- In addition to the acquisition of Globalstar USA as noted above, Globalstar also acquired the gateway operations in Aussaguel, France, from the company's service provider partner, TE.SA.M. This gateway serves customers across much of Europe, northern Africa and the northern Atlantic Ocean.

-- Globalstar became the first -- and so far only -- satellite phone company to build and demonstrate a functioning Ancillary Terrestrial Component (ATC) system, using a modified Model 650 Telit tri-mode phone operating over Globalstar's existing MSS frequencies. If implemented commercially in the U.S., an ATC phone unit could ultimately operate in three modes: satellite mode over MSS frequencies, cellular mode over MSS frequencies, and cellular over terrestrial cellular frequencies.

-- Globalstar announced the successful test of a very low cost simplex modem, developed in cooperation with AeroAstro. Commercial implementation of simplex data service is scheduled for January 2003.

-- Another equipment manufacturer, Sea Tel, shipped the first commercial production unit of its Globalstar multi-channel modem unit (MCM-3), making medium data-rate communications available to maritime users over the Globalstar system.

-- Mykotronx, a producer of high-level data security devices, confirmed that Type 1 encrypted data -- the U.S. government's highest level of secure data -- can now be sent and received over the Globalstar system using the KIV-7 encryption unit manufactured by Mykotronx.

-- Elsacom, Globalstar's service provider in Italy, took part in a remote medical diagnostic demonstration with Medtronic, a leading medical technology company. In the demonstration, doctors in a Sicilian hospital were able to monitor a patient's electro-cardiogram (EKG) data, diagnose the illness and prescribe treatment, even though the patient was on a boat many miles offshore. This was made possible by connecting Medtronic EKG equipment to a Globalstar phone, with the resulting data sent back to the hospital in real time. This system demonstrates the potential value of Globalstar service in providing support for emergency medical services in remote locations.

After the close of the quarter, Globalstar also took part in a demonstration conducted by NASA Glenn Research Center and the U.S. Coast Guard of a highly secure mobile networking system that can provide dependable data communications, even beyond the range of terrestrial wireless networks. Globalstar provided the space segment of the network.

Satellite Constellation

Globalstar's satellite constellation has generally continued to perform well. Since early 2001, a number of satellites have experienced operating anomalies, but in most cases the satellites successfully recovered and were returned to service. To date, only two satellites have been declared failed, and they have been replaced with on-orbit spares.

Currently, three satellites out of Globalstar's 48-satellite constellation are out of service, undergoing diagnostic testing and recovery operations. As a result, users may experience brief service outages a few times a day, depending on their location. Since the current anomalies appear similar to those experienced on satellites that have been successfully recovered, Globalstar is using its earlier experience to work toward further recoveries, although no fixed timetable for recovery of these satellites can be assured at this time.

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 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.