Press Release

Qualcomm Announces Information Statement for Spin-Off of Operating Company Interests

Jul 1, 1998SAN DIEGO

Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

Qualcomm Incorporated (NASDAQ: QCOM) today announced the filing of an information statement with the Securities and Exchange Commission relating to a proposed spin-off of Qualcomm's joint venture and equity interests in certain terrestrial-based wireless communications operating companies. The spin-off is expected to be completed in September 1998.

Should the spin-off occur, it will be made by means of a distribution by Qualcomm to its stockholders of shares of a new company created in order to effect the transaction. The new entity is currently known as "Qualcomm SpinCo, Inc." (SpinCo) but will change its name prior to the completion of the transaction.

Holders of Qualcomm Common Stock will receive one share of SpinCo Common Stock for each four shares of Qualcomm Common Stock held as of a record date to be specified. In addition, outstanding Qualcomm stock options and trust convertible preferred securities will be adjusted so that upon exercise or conversion thereof, the holders will receive the number of SpinCo shares that would have been issued with respect to such securities had they been exercised or converted immediately prior to the distribution. The distribution is expected to be taxable as a dividend to each stockholder of Qualcomm on the date of distribution. Following the distribution, Qualcomm expects that a public market will exist for the SpinCo Common Stock.

The distribution remains subject to approval by Qualcomm's Board of Directors. Until the distribution has been completed, the terms of the distribution may be modified or the transaction may be abandoned at any time.

Upon completion of the distribution, SpinCo will own Qualcomm's joint venture and equity interests in Pegaso S.A. de C.V. (Mexico), Metrosvyaz (Russia), Telesystems of Ukraine (Ukraine), ChileSat Telefonía Personal,S.A. (Chile), Chase Telecommunications, Inc. (United States), OzPhone Pty. Ltd. (Australia) and certain other development-stage businesses. Qualcomm also intends to transfer to SpinCo $10 million in cash, certain notes convertible into equity interests in certain of these operating companies and certain other indebtedness of such companies owed to Qualcomm. In addition, Qualcomm will make a substantial funding commitment to SpinCo in the form of a $250 million secured credit facility.

Qualcomm will retain a warrant to purchase shares of SpinCo Common Stock exercisable during the ten years following the distribution, representing approximately 18% of SpinCo's outstanding shares on a fully-diluted basis as of the distribution date. Qualcomm will continue as an equipment supplier for SpinCo's operating companies and will retain substantially all of its rights under its equipment supply agreements with those entities.

Harvey P. White, who has served as president of Qualcomm since May 1992, will serve as SpinCo's president, chief executive officer and chairman of the board. In addition, Thomas J. Bernard, who has served as senior vice president and general manager of Qualcomm's Infrastructure Products Division since April 1996, will serve as executive vice president of SpinCo.

The distribution of the SpinCo Common Stock shall only be made by means of a prospectus. An information statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the information statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar low-earth-orbit (LEO) satellite communications system. Other Company products include the Eudora Pro® electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide. For more information on Qualcomm products and technologies, please visit the Company's web site at

A copy of the SpinCo information statement may be obtained from any of thefollowing Qualcomm representatives:

Julie Cunningham
Investor Relations
1-(619) 658-4224
Richard Grannis
1-(619) 658-4817
Christine Trimble
Corporate Public Relations
1-(619) 651-3628