Under the service agreement, Al-Murjan will act as the sole distributor of Globalstar mobile satellite services in Kuwait, United Arab Emirates, Qatar, Oman, Yemen, Jordan, Syria, and Bahrain. It will own and operate a centrally located Globalstar ground station (gateway) and obtain all necessary regulatory approvals for interconnecting the Globalstar system with those nations' existing wireline and wireless infrastructure. The exact location of the planned gateway is under study.

"This agreement completes Globalstar's service provider plans for the Middle East," said Anthony J. Navarra, executive vice president for Globalstar. "Globalstar now has service provider agreements in 114 nations, covering 90 percent of Globalstar's business plan."

According to the International Telecommunications Union (ITU), the number of main telephone lines in the Middle East region is approximately 6.3 lines per 100 people, while the number of cellular users, currently 1.2 million users, has been doubling every three years. The dual-mode (cellular and satellite) Globalstar system has been expressly designed to extend cellular-type service in regions of the world where it has not been cost-effective or practical to build out terrestrial cellular infrastructure. Moreover, Globalstar is expected to offer an affordable means to meet basic telephony needs in remote regions that have little or no telephone service.

"This project will greatly enhance the development of mobile satellite services in the Middle East and further satisfy demand for telecommunications," said Mr. Sultan K. Bin Mahfouz, chairman of Al-Murjan. "Working with Globalstar, we will bring the benefits of advanced communications to people throughout the region."

Subscribers in the Middle East will use mobile terminals similar to today's cellular phones, with dual-mode capability so they will be able to switch from satellite telephony to conventional cellular telephony as required. Some Globalstar users in 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 a gateway that, in turn, will connect calls into existing telecommunications networks.

Al-Murjan is a Saudi multinational company with manufacturing and trading operations in various industries. Al-Murjan's current activities encompass manufacturing, trade and distribution of consumer products, investments, design and supply of desalinization plants, supply of equipment to the printing and graphics industries, and operations in the marine and mineral industries. Al-Murjan conducts activities in Saudi Arabia and in other regional and international markets.

The Globalstar system, comprising 48 low-earth-orbit (LEO) satellites and a global network of ground stations, will allow people around the world to make or receive calls using hand-held, vehicle-mounted and fixed-site terminals. Globalstar will also provide data transmission, messaging, facsimile and position location services. Globalstar currently has eight satellites in orbit and expects to launch 36 additional satellites by the end of the year. Four Globalstar gateways are being used to control and test the satellite system, and site work and construction is under way at 20 more gateway sites around the world.