Globalstar , the global mobile satellite telephone
service, today announced its results for the quarter ended March 31,
2001, which showed growth in both voice and data traffic.

While the company is continuing to work on restructuring its debt,
Globalstar’s marketing efforts remain uninterrupted. As a result, the
company’s rate of growth, both in minutes of use (MOUs) and subscriber
numbers, rose substantially over the previous quarter.

Globalstar recorded a total of 4 million minutes of use (MOUs),
including both mobile and fixed service, in the first quarter,
representing a 53% increase in traffic over the previous quarter. The
estimated number of mobile and fixed subscribers at the end of March
was 40,700, an increase of over 30% from the previous quarter. As of
the end of April, there were approximately 44,000 subscribers
registered on the Globalstar system.

Most key markets continued to show encouraging MOU growth over the
previous quarter, including Russia (up 118%), Canada (up 78%), Saudi
Arabia (up 179%) and Argentina (up 101%). In addition, MOUs in the
Central American countries collectively were up 45%, driven in large
part by strong fixed phone usage.

Data services, which were introduced in North America in late
December, represented 4% of total billable minutes for the quarter.
This is expected to rise substantially as data is introduced in other
markets. In March, data represented nearly 8% of total traffic volume,
driven by testing and demonstrations in Mediterranean markets.

“The introduction of data services has opened up a variety of new
opportunities for Globalstar, not just for data-only customers but
also for business and industry users who have an important requirement
for both data and voice communications,” said Tony Navarra, president
of Globalstar. “The response from data users in North America has been
very encouraging, and we are already at work implementing this feature
in other gateways around the world.”

In early May, the Globalstar partners, along with advisors from
The Blackstone Group, reviewed several business proposals to continue
and to strengthen Globalstar’s business. Efforts to restructure the
company’s debt remain on track, and work on a final plan is expected
to continue into the third quarter of this year.

Financial Results

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

Gross service revenue for the first quarter was $1.9 million, up
66% over the previous quarter, and net revenue, including royalty
income from phone sales and less discounts and promotions, was $1.5
million, an increase of 32% over the fourth quarter of 2000.

Globalstar, L.P. reported a net loss applicable to ordinary
partnership interests for the quarter of $145 million or $2.25 per
partnership interest that converts to a loss of $0.31 per share of
Globalstar Telecommunications Ltd.

As of March 31, 2001, Globalstar had approximately $138 million in
cash and cash equivalents, including restricted cash. As part of the
company’s work to conserve cash, Globalstar has instituted a number of
cost saving measures across the company. According to the company’s
current operating plan, Globalstar has sufficient cash to continue
operations through the end of 2001.

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 expected cash outflow by
approximately $400 million for the year 2001. As a result of these
actions, however, defaults have now occurred with respect to some of
Globalstar’s debt.

Operating and Marketing Initiatives

Globalstar is taking several steps to broaden and strengthen its
business and marketing operations, including:

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 encouraging. 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. Globalstar is working
with outside companies to develop further specialized equipment for
aviation, maritime, and other potential data markets.

Expansion of service in new country markets: During the quarter,
two new gateways – in Ogulbey, Turkey, and Manaus, Brazil – initiated
service, and the State Planning Commission in China gave its approval
for a second and third gateway to be constructed in that country.
Globalstar service coverage now reaches 109 countries or over 75% of
the world’s land areas.

Extension of coverage in maritime areas: Because the Globalstar
gateways have 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. 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

Fixed phone services: Installation of fixed phones grew, with
phones installed on public intercity buses in Brazil, in remote
communities across Central America and Morocco, and along highways in
Argentina. At a single mining operation in Honduras, five fixed phones
each are 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 now markets a marine satellite
telephone package for installation and use aboard ships. The package,
which includes a Globalstar Qualcomm fixed access unit along with a
weatherproof antenna housing and related equipment, is included in
SeaTel’s current catalog of products.

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 earthquakes earlier this
year in El Salvador and in rescue work by the Royal Canadian Mounted

System Update

The Globalstar system continues to operate well, with impressively
high rates of call retention and call completion. In recent months,
three satellites experienced operational anomalies and have been taken
out of service pending further analysis and investigation. While work
on restoring these satellites continues, on-orbit spare satellites are
gradually being maneuvered toward the orbital slots of the affected
satellites. If these satellites cannot be restored to full service in
the coming months, the company will then have the option of replacing
them with the on-orbit spares. In the meantime, this temporary
situation has caused minimal impact to overall service, usually for a
few minutes per day and generally only for users in equatorial or very
Northern or Southern latitude regions.

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

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.