Ltd. said yesterday it expected to avoid the pitfalls that led its two largest rivals to file for bankruptcy protection earlier this month.

The Bermuda-based 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 US Bankruptcy Code. Two weeks earlier, Iridium filed for bankruptcy protection.

Analysts have questioned whether there is a future for satellite telephony after Bermuda-placed 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.