Globalstar Posts Q1 Loss

For the first quarter ended March 31, 2000, satellite service provider Globalstar USA (New York) reported a net loss of $216 million or $3.53 per partnership interest that converts to $0.98 per share of Globalstar Telecommunications Ltd. However, the company noted that service did not begin in any significant degree until March. Important markets such as Canada and Brazil were in full commercial service for only a few weeks of the quarter, and Australia began service on March 30. Full commercial service is soon to be initiated in other key markets such as China, Russia, and South Africa.

Partners introduced full commercial service in seven countries in January, with a further ten countries added in February. As of March 31, 25 countries were in full service, served by 11 gateways.
For the 13-week period ended March 31, 2000, Globalstar L.P. recorded 550,000 minutes of billable service, and revenues for the quarter, including royalties, were $609,000. Additionally, to date, five Globalstar partners have agreed to participate in the program to pre-purchase discounted minutes of use, amounting to $19 million in pre-committed revenue.

Early issues relating to the production and shipment of phones have now been solved by all three manufacturers (Qualcomm, Telit, and Ericsson), and production is expected to meet the company's business plans and objectives for 2000. From late-1999 through the end of April, the three manufacturers had shipped approximately 67,000 phones. They have further supported Globalstar's marketing efforts by accelerating development and production of car and marine kits, which are now being shipped. A further order of 30,000 additional Telit phones was signed in April, adding to existing prior orders of 300,000.

Edited by Ellen Jensen