"The addition of China Telecom as a full partner solidifies Globalstar's commitment to bringing the promise of mobile satellite communications to China's 1.2 billion people," said Bernard L. Schwartz, chairman and chief executive officer of Globalstar L.P. and of Loral Space & Communications, Globalstar's largest equity owner. "China is installing 15 million lines of switching capacity and 100,000 kilometers of fiber optic cables each year. But built-up demand cannot be satisfied. China's national telephone installation waiting list is over 5 million, and it is increasing every day. Globalstar is an efficient, affordable and timely solution to meeting this incredible demand."

China Telecom and CHINASAT will manage all Globalstar operations in China. China's first Globalstar gateway is nearing completion in Beijing, with subsequent gateways to be built in Guangzhou and Lanzhou, where siting and survey work is underway. Including China, Globalstar now has service provider agreements in more than 100 countries, covering 85% of Globalstar's business plan.

China Telecom (Hong Kong) Group Ltd. is a dominant telecommunications services provider in China and serves nearly 10 million cellular subscribers. CHINASAT, based in Beijing, is responsible for managing and operating China's domestic civil telecommunications and broadcast satellite systems. CHINASAT owns several telecommunications satellites, controlling them from its first-class telemetry tracking and control earth station in Beijing. It also operates China's largest VSAT (very small aperture terminal) networks.

China possesses the world's largest population and is the fastest-growing major economy, with real growth of 12 percent a year. China's telephony penetration rate is currently less than 5%, and some 500,000 rural Chinese communities are in need of improved telecommunications services.

Some subscribers in China will use mobile terminals, similar to today's cellular phones, with dual-mode capability so users can switch from satellite telephony to conventional cellular telephony as required. Users in China's rural and remote areas may make or receive calls through fixed-site telephones, similar either to phone booths or ordinary wireline telephones. Subscriber terminals will communicate through a Globalstar satellite to one of China's planned gateways or ground stations that in turn will connect calls into China's existing telecommunications network.

The Globalstar system, comprising 48 low-earth-orbiting (LEO) satellites and a global network of ground stations, will allow people in areas of the world with inadequate or non-existing telecommunications infrastructure to make or receive calls using hand-held, vehicle-mounted and fixed-site terminals. The Globalstar system will also provide data transmission, paging, and facsimile services. The first four Globalstar satellites were successfully launched on February 14, 1998, and Globalstar expects to launch a total of 44 satellites by the end of the year.