Globaltouch West Africa Limited: A Case for Reinvestment toward profitability INTRODUCTION

2013 was meant to be a year of milestones at Globaltouch operationally, financially and strategically. Tremendous progress should have been made in advancing the company s three fundamental drivers of value creation! low"cost second"generation constellation# upcoming innovative products# and our valuable spectrum assets. $y leveraging last year s cost reduction initiatives, Globaltouch should be turning the corner to profitability.

COMPLETED LAUNCH OF LOW-COST SECOND-GENERATION CONSTELLATION

%n &ebruary ', 2013 Globalstar successfully completed a fourth launch campaign with a technically perfect launch from the (osmodrome in $ai)onur, *a+a)hstan. ,ll previously launched second"generation satellites are in commercial service, and the satellites from the fourth launch have successfully completed initial testing. The satellites from the launch are currently being placed in service thereby creating a path for profitability. This important milestone distinguishes Globalstar as the first -.. provider to launch a second" generation constellation of /0% satellites, at a fraction of the cost of its first"generation networ), and places Globalstar years ahead of the competition, especially 1ridium. 1n addition, the significant cost benefits and networ) performance enhancements of the new constellation create a strong and defensible position for us to offer the best value proposition to our customers. ,s coverage and 2uality improves with each new satellite placed into service, we fully e3pect our customers and potential re"sellers to continue to re"engage with us and our voice and data minutes of use and ,456 to rebound. 7ith the restoration of full service, Globalstar will become once again the preeminent provider of affordable, reliable high"2uality mobile satellite voice and data service.

BUSINESS OVERVIEW
Globaltouch is partnering with Globalstar, 1nc. who is a leading provider of -obile .atellite .ervices 89-..:; including voice and data communications services globally via satellite. This capability provides Globaltouch with resources to provide wireless services in areas not served or underserved by terrestrial wireless and wireline networ)s. 7e see) to meet our customers< increasing desire for connectivity. 7e offer voice and data communication services over Globalstar<s networ) of in"orbit satellites and our active ground station. 7ith the current new generation constellation Globalstar defines successful level of service for customers as measured by their ability to ma)e uninterrupted calls of average duration for a system"wide average number of minutes per month. The goal is to provide service levels and call success rates e2ual to or better than other -.. competitors so that our products and services are attractive to potential customers. Globalstar define voice 2uality as the ability to easily hear, recogni+e and understand callers with imperceptible delay in the transmission. =ue to the uni2ue design of the Globalstar .ystem, we outperform on this measure versus geostationary satellite 89G0%:; competitors due to the difference in signal travel distance, appro3imately >>,000 additional miles for G0% satellites, which introduces considerable delay and signal degradation to G0% calls. &or our competitors using cross"lin)ed satellite architectures, which re2uire multiple inter"satellite connections to complete a call, signal

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability

degradation and delay can result in compromised call 2uality as compared to that e3perienced over the Globalstar .ystem. 7e also compete aggressively on price. 7e can offer bundled pricing plans a)in to that from the terrestrial wireless industry, this is ground brea)ing in the -.. industry. The ultimate goal and plan for Globalstar and in essence, Globaltouch is to continue to innovate and retain our position as the low cost, high 2uality leader in the -.. industry in ?igeria and 7est ,frican region. %ur satellite communications business, by providing critical mobile communications to our subscribers, serves principally the following mar)ets! recreation and personal# government# public safety and disaster relief# oil and gas# maritime and fishing# natural resources, mining and forestry# construction# utilities# and transportation. ,t =ecember 31, 2012, we served over '0 customers, both corporate and private. 7e have an appreciable number of active subscribers. 7e count @subscribers@ based on the number of devices that are subAect to agreements which entitle them to use our voice or data communications services rather than the number of persons or entities who own or lease those devices. 7e currently have capability to provide the following communications services via satellite! B one"way data transmissions between a mobile or fi3ed device that transmits its location and other information to a central monitoring station, which includes the .5%T family of consumer mar)et products 89.5%T:; and .imple3 products. 7ith upgrade we can provide two"way voice communication and data transmissions, which we call 9=uple3,: between mobile or fi3ed devices. 1t is noteworthy here that our services are available only with e2uipment designed to wor) on our networ). The e2uipment we offer to our customers consists principally of! B (onsumer retail .5%T products# B (ommercial .imple3 one"way transmission products# B =uple3 products, including voice and two"way data8 1n the near future after the upgrade;# The second"generation constellation is designed to support Globalstar<s current lineup of =uple3, .5%T family 8.5%T .atellite G5. -essenger and .5%T (onnect; and .imple3 data products. 7ith the improvement in both coverage and service 2uality for our =uple3 product offerings resulting from the deployment of our second"generation constellation, we anticipate an e3pansion of our subscriber base and increases in our average revenue per user, or 9,456.: %ur products and services are sold through a variety of independent agents, dealers and resellers. %ur success in mar)eting these products and services is enhanced through diversification of our distribution channels, consumer and commercial mar)ets, and product offerings.

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability Commercial Simple O!e-Wa" Tra!#mi##io! Pro$%c&#
.imple3 service is a one"way burst data transmission from a commercial .imple3 device over the Globalstar .ystem that can be used to trac) and monitor assets. %ur subscribers presently use our .imple3 devices to trac) cars, trailers, tan)ers# to monitor utility meters# as well as a host of other applications. ,t the heart of the .imple3 service is a demodulator and 4& interface, called an appli2uC, which is located at a gateway and an application server located in our facilities. The server receives and collates messages from all .imple3 telemetry devices transmitting over our satellite networ). .imple3 devices consist of a telemetry unit, an application specific sensor, a battery and optional global positioning functionality. The small si+e of the devices ma)es them attractive for use in trac)ing asset shipments, monitoring unattended remote assets, trailer trac)ing and mobile security. (urrent users include various governmental agencies, including the ?(,,8 ?igerian (ivil ,viation ,uthority;, the ?igerian =efense Dead2uarters, 5ower Dolding (ompany of ?igeria, as well as other organi+ations, including *45(E??5(. 7e designed our .imple3 service to address the mar)et for a small and cost"effective solution for sending data, such as geographic coordinates, from assets or individuals in remote locations to a central monitoring station. (ustomers are able to reali+e an efficiency advantage from trac)ing assets even in places with no terrestrial networ) coverage. %ur .imple3 units, including the enterprise products --T and .-,4T%?0, are used worldwide by industrial, commercial and government customers. These products provide cost"effective, low power, ultra"reliable, secure monitoring that help solve a variety of security applications and asset trac)ing challenges.

D%ple T'o-Wa" Voice a!$ Da&a Pro$%c&#

The upgrade of the gateway we see) will bring alive the -obile Foice and =ata .atellite (ommunications capability of Globaltouch. 7ith this capability we will provide mobile voice and data services to a wide variety of commercial, government and recreational customers for remote business continuity, recreational, emergency response and other applications. .ubscribers under these plans typically pay an initial activation fee to an agent or dealer, a monthly usage fee to us that entitles the customer to a fi3ed or unlimited number of minutes, and fees for additional services such as voicemail, call forwarding, short messaging, email, data compression and internet access. 03tra fees may also apply for non"voice services, roaming and long"distance. 7e will regularly monitor our service offerings in accordance with customer demands and mar)et changes and offer pricing plans such as bundled minutes, annual plans and unlimited plans. 7e will offer our services for use only with e2uipment designed to wor) on our networ), which users generally purchase in conAunction with an initial service plan. 7e shall offer the G.5"1G00 phone, which includes a user"friendly color /(= screen and a variety of accessories. The phone design represents a significant improvement over earlier"generation e2uipment that we believe will facilitate increased adoption from prospective users. 7e also believe that the G.5"1G00 is among the smallest, lightest and least"e3pensive satellite phones available. 7e are the only -.. provider using the patented Hualcomm (=-, technology that we believe provides superior voice 2uality when compared to competitive handsets. The upgrade will provide capability for fi3ed voice and data services in rural villages, at remote industrial, commercial and residential sites and on ships at sea, among other places, primarily with our G.5"2I00 fi3ed phone. &i3ed voice and data satellite communications services are in

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability

many cases an attractive alternative to mobile satellite communications services in environments where multiple users will access the service within a defined geographic area and cellular or ground phone service is not available. %ur fi3ed units also may be mounted on vehicles, barges and construction e2uipment and benefit from the ability to have higher gain antennas. %ur fi3ed voice and data service plans are similar to our mobile voice and data plans and offer similar fle3ibility. 1n addition to offering monthly service plans, our fi3ed phones can be configured as pay phones installed at a central location, for e3ample, in a rural village. The upgrade will also bring to fore our .atellite =ata -odem .ervices. 1n addition to data utili+ation through fi3ed and mobile services described above, we will offer data"only services. =uple3 devices have two"way transmission capabilities. ,sset"trac)ing applications enable customers to control directly their remote assets and perform comple3 monitoring activities. 7e shall offer asynchronous and pac)et data service in all of our =uple3 territories. (ustomers can use our products to access the internet, corporate virtual private networ)s and other customer specific data centers. %ur satellite data modems can be activated under any of our pricing plans. 7e shall provide store"and"forward capabilities to customers who do not re2uire real" time transmission and reception of data. ,dditionally, we offer a data acceleration and compression service to the satellite data modem mar)et. This service increases web"browsing, email and other data transmission speeds without any special e2uipment or hardware. The G.5"1G20 is a satellite voice and data modem board with multiple antenna configurations and an enlarged set of commands for modem control. This board is attractive to integrators because it has more user interfaces that are easily programmable. This ma)es it easier for Globaltouch to integrate the satellite modem processing with the specific application, such as monitoring and controlling oil and gas pumps, electric power plants and other remote facilities thereby providing customi+ed solution.

Up(ra$e o) &*e Ga&e'a"

The upgrade of the gateway will support both e3isting and new products and services. The upgrade is necessary so as to e2uip the gateway with the full capabilities to harness to the fullest the potentials of the new constellation and it is referred to as the ?e3t"Generation 1-. Ground ?etwor). Globalstar currently has a contract with Dughes ?etwor) .ystems, //( 89Dughes:; under which Dughes will design, supply and implement 8a; the 4adio ,ccess ?etwor) 8@4,?@; ground networ) e2uipment and software upgrades for installation at a number of satellite gateway ground stations and 8b; satellite interface chips to be a part of the 6ser Terminal .ubsystem 896T.:; in our various ne3t"generation Globalstar devices. Globalstar also have a contract with 0ricsson, 1nc. 890ricsson:; to develop, implement and maintain a ground interface, or core networ), system that will be installed at various satellite gateway ground stations. The core networ) system is wireless 3GE>G compatible and will lin) our radio access networ) to the public"switched telephone networ) 895.T?:; andEor 1nternet. This new core networ) system will be part of our ne3t"generation ground networ). 7ith Globalstar<s second"generation constellation combined with our ne3t"generation ground networ), is designed to provide our customers with enhanced future services featuring increased data speeds of up to 2J' )bps in a fle3ible 1nternet protocol multimedia subsystem 891-.:; configuration. 7e will be able to support multiple products and services, including

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability

multicasting# advanced messaging capabilities such as -ultimedia -essaging .ervice 89--.:;# geo"location services# multi"band and multi"mode handsets# and data devices with G5. integration.

UPGRADE COST

&6// 65G4,=0 4adio ,ccess ?etwor) 4,? 8 1nstallation. 1ntegration and Testing; " +,-...-... (ore ?etwor) (? " .G.?, GG.?, .E1E5 (.(&, =?., -G7, -G(, .G, D/4ED.., ,ll ,pps .erver 81nstallation and Testing, ; + /-,..-... Dughes 4,? 5ayment 5lan! 20K at order 20K at site surveys completion 20K at ship to gateway 20K at installationEtesting completedEaccepted 20K at over"the"air testing completedEaccepted %ther (osts! 1nterconnection (ost " +0,.-... ,nnual 4,? 7arranty " +11-234 Learly (? support +055-... 1?T04-0=1,T0 65G4,=0 $ut the current e2uipment and setup of the gateway can still render high grade services with the new constellation. ,ll that is re2uired is a selective and customi+ed upgrade. 1nterconnection (ost" +0,.-... ,nnual 1nterconnection .ubscription" +2..-... .oft .witch 1nstallation" +,..-...

I!$%#&r"

7e compete in the mobile satellite services, -.., sector of the global communications industry. That sector is not fully developed in ,frica, especially ?igeria. -obile satellite service operators provide voice and data services using a networ) of one or more satellites and associated ground facilities. -obile satellite services are usually complementary to, and interconnected with, other forms of terrestrial communications services and infrastructure and are intended to respond to users< desires for connectivity at all times and locations. (ustomers typically use satellite voice and data communications in situations where e3isting terrestrial wireline and wireless communications networ)s are impaired or do not e3ist. 7orldwide, government organi+ations, military, natural disaster aid associations, event"driven response agencies and corporate security teams depend on mobile and fi3ed voice and data communications services on a regular basis. $usinesses with global operating scope re2uire communications services when operating in remote locations around the world. -obile satellite services users span the forestry, maritime, government, oil and gas, mining, leisure, emergency services, construction and transportation sectors, among others. 7e believe many such customers increasingly view satellite communications services as critical to their daily

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability

operations. %ver the past two decades, the global mobile satellite services mar)et has e3perienced significant growth. 1ncreasingly, better"tailored, improved"technology products and services are creating new channels of demand for mobile satellite services. Growth in demand for mobile satellite voice services is driven by the declining cost of these services, the diminishing si+e and lower costs of the handsets, as well as, heightened demand by governments, businesses and individuals for ubi2uitous global voice coverage. Growth in mobile satellite data services is driven by the rollout of new applications re2uiring higher bandwidth, as well as low cost data collection and asset trac)ing devices. (ommunications industry sectors that are relevant to our business include! B mobile satellite services, which provide customers with connectivity to mobile and fi3ed devices using a networ) of satellites and ground facilities# B fi3ed satellite services, which use geostationary satellites to provide customers with voice and broadband communications lin)s between fi3ed points on the earth<s surface# and B terrestrial services, which use a terrestrial networ) to provide wireless or wireline connectivity and are complementary to satellite services. 7ithin the maAor satellite sectors, fi3ed satellite services and mobile satellite services operators differ significantly from each other. &i3ed satellite services providers, such as 1ntelsat /td., 0utelsat (ommunications and .0. ..,., and aperture terminals companies, such as Dughes and Gilat .atellite ?etwor)s, are characteri+ed by large, often stationary or @fi3ed,@ ground terminals that send and receive high"bandwidth signals to and from the satellite networ) for video and high speed data customers and international telephone mar)ets. %n the other hand, mobile satellite services providers, such as Globalstar, 1nmarsat 891nmarsat:; and 1ridium (ommunications, 1nc. 891ridium:;, focus more on voice and data services 8including data services which trac) the location of remote assets such as shipping containers;, where mobility or small si+ed terminals are essential. ,s mobile satellite terminals begin to offer higher bandwidth to support a wider range of applications, we e3pect mobile satellite services operators will increasingly compete with fi3ed satellite services operators. /0% systems, such as the systems Globalstar and 1ridium currently operate, reduce transmission delay compared to a geosynchronous system due to the shorter distance signals have to travel. 1n addition, /0% systems are less prone to signal bloc)age and, conse2uently, we believe provide a better overall 2uality of service.

Compe&i&io!

Generally, the global communications industry is highly competitive. Globatouch currently faces substantial competition from other service providers that offer a range of mobile and fi3ed communications options. %ur most direct competition comes from terrestrial communication service providers li)e -T?, 0tisalat, G/% etc. 7e compete indirectly with these terrestrial wireline 89landline:; and wireless communications networ)s. 7e provide service in areas that are inade2uately covered by these networ)s. To the e3tent that terrestrial communications companies invest in underdeveloped areas, we will face increased competition in those areas. %n a global scale, our partner, Globalstar<s two largest global competitors are 1nmarsat and 1ridium. They compete primarily on the basis of coverage, 2uality, portability and pricing of services and products. 1nmarsat owns and operates a fleet of geostationary satellites. =ue to its multiple"satellite geostationary system, 1nmarsat<s coverage area e3tends to and covers most

Globaltouch West Africa Limited: A Case for Reinvestment toward profitability

bodies of water more completely than Globalstar. ,ccordingly, 1nmarsat is the leading provider of satellite communications services to the maritime sector. 1nmarsat also offers global land" based and aeronautical communications services. 1nmarsat generally does not sell directly to customers. 4ather, it mar)ets its products and services principally through a variety of distributors, who, in most cases, sell to additional downstream entities who sell to the ultimate customer. Globalstar also compete with 1nmarsat in several )ey areas, particularly in maritime mar)ets. 1nmarsat has launched a mobile handset designed to compete with both 1ridium s mobile handset service and Globalstar<s G.5"1G00 handset service. 1ridium owns and operates a fleet of low earth orbit satellites that is similar to Globalstar networ) of satellites. 1ridium provides voice and data communications to businesses, 6nited .tates and foreign governments, non"governmental organi+ations and consumers. 1ridium sells its products and services to commercial end users through a wholesale distribution networ). 7e have faced increased competition from 1ridium and 1nmarst in ?igeria as a result of the proliferation of products build upon these platforms. =uring 2011, 1ridium introduced a product that delivers remote communication features including send and receive te3t messaging, interactive .%., and message delivery information. Globaltouch also compete with regional mobile satellite communications services. -ost of these competitors operate geostationary satellites. %ur main regional mobile satellite services competitors currently is Thuraya, principally in the -iddle 0ast and ,frica. They deploy to governments, %il and Gas and other big business sectors in ?igeria. 1n some of our mar)ets, such as rural telephony, we compete directly or indirectly with very small aperture terminal 89F.,T:; operators that offer communications services through private networ)s using very small aperture terminals or hybrid systems to target business users. F.,T operators have become increasingly competitive due to technological advances that have resulted in smaller, more fle3ible and cheaper terminals. %ur industry has significant barriers to entry in ?igeria and this includes the cost and difficulty associated with obtaining spectrum licenses and the cost of building a gateway. 1n addition to cost, there is a significant amount of lead"time associated with obtaining the re2uired licenses, designing, building and synchroni+ing the networ) technology.

BUSINESS SUCCESS
The success of our business plan will depend on a number of factors, including! B our ability to maintain the health, capacity and control of our gateway and also the health, performance and stability of the satellite constellation. B our ability to maintain or reduce costs # B the level of mar)et acceptance and demand for all of our services# B our ability to introduce new products and services that meet this mar)et demand# B our ability to retain and obtain new customers# B our ability to obtain additional business using our e3isting spectrum resources both in ?igeria and other 7est ,frican countries# B our ability to mar)et successfully our .5%T and .imple3 products and services# B our ability to develop and deploy innovative networ) management techni2ues to permit mobile devices to transition between satellite and terrestrial modes# B our ability to sell the e2uipment inventory on hand# B the effectiveness of our competitors in developing and offering similar products and services and in persuading our customers to switch service providers.