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To: Ruffian who wrote (39092)	8/31/1999 3:50:00 PM
From: SpudFarmer	Respond to of 152472

Tuesday August 31 3:32 PM ET Globalstar Sees Satellite Phone Success By Emily Kaiser CHICAGO (Reuters) - Satellite telephone company Globalstar Telecommunications Ltd (Nasdaq:GSTRF - news). said Tuesday it expected to avoid the pitfalls that led its two largest rivals to file for bankruptcy protection earlier this month. The company, which wants to provide telephone service around the world through a system of low-earth-orbiting satellites, expected to turn a profit by the end of 2000 by offering less expensive service to a base of customers in rural or underdeveloped areas of the world. Globalstar's share price has dropped 10 percent since Friday, when rival ICO Global Communications Ltd. filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code. Two weeks earlier, Iridium LLC filed for bankruptcy protection. Analysts have questioned whether there is a future for satellite telephony after Iridium and ICO Global. They said satellite telephone companies underestimated the rapid expansion of cellular service, which eroded demand for the more expensive satellite phones. In a telephone interview with Reuters, Globalstar Chairman Bernard Schwartz said his company fully expected the explosive growth in cellular phone service, but still saw huge demand for satellite phones in rural and underdeveloped areas. ``There is a very marked difference between the services that were being offered by ICO and Iridium on one side and Globalstar on the other,' Schwartz said. Among the differences was that Globalstar's service was less expensive than Iridium's. The phones were smaller and lighter and they can operate on both satellite and cellular signals, which meant they worked inside cars or buildings without a separate attachment. Still, the handsets themselves will cost about $1,000 to $1,100 when they are commercially available later this year. although Schwartz said the cost should come down to about $750 when production is ramped up. Air time will run between $1.00 and $1.25 a minute. That is cheaper than Iridium, but it may still be a high price to pay for many of the people that Globalstar was targeting in underdeveloped areas. Schwartz said Globalstar was aiming for ``the typical cellular user who lives in an area where there is no cellular service' -- countries such as Brazil, India, China and Russia. He said Globalstar had teamed up with local phone companies in different countries and asked them to assess the potential market for Globalstar phones. ``In India, we have 88,000 people in our plan by the year 2002 that will buy Globalstar,' he said. ``In China, we have 200,000, in Brazil, 200,000, in Germany, 8,000, in Turkey, 30,000-40,000. The local service provider in each one of these areas has made an assessment of the market.' The shares of Globalstar, which is 42 percent owned by Loral Space & Communications Ltd (NYSE:LOR - news)., were off 1-7/16 at 25-1/4 in afternoon Nasdaq trading. Trading in ICO Global and Iridium shares has been halted since they filed for bankruptcy protection.