BEDMINSTER, NJ - June 26, 2005 - Loral Skynet today announced that it has entered into an agreement with BtNAccess, a global provider of communications services, to extend Loral's SkyReach(SM) IP-enabled communications services to Asia, providing regional users with regional and global public Internet and private networking services, including broadband Internet access, voice over IP (VoIP), and managed data services.

"Loral Skynet has assembled a service in SkyReach that combines the best of satellite and terrestrial communications technologies, providing reliable, cost effective IP-based solutions," said Bernard L. Schwartz, chairman and CEO of Loral Space & Communications. "IP technology is driving the future of enterprise and government communications and it's a technology that Loral has been applying and offering in its service portfolio for over 10 years as a pioneer of IP over satellite."

Loral Skynet's Asia focused SkyReach service is powered by an iDirect IP hub at the BtNAccess teleport in Hong Kong. Skynet will combine satellite capacity on its Telstar 10 and Telstar 18 Asian satellites with teleport and terrestrial communications services, including multi-protocol label switching (MPLS), provided by BtNAccess to provide a robust, far-reaching IP-based network.

"Skynet's satellite and IP resources combined with the terrestrial MPLS and teleport capabilities of BtNAccess instantly allows us to deliver an integrated IP-based network capability that surpasses any other IP offering in the region," said Patrick Brant, president of Loral Skynet. "By combining our new SkyReach capability in Asia with other SkyReach hub locations in the U.S. and Europe, Loral Skynet provides a unique, global IP-based solution that addresses the local, regional and international needs of enterprise-level users."

The SkyReach service in Asia will be available in July, using VSAT technology to deliver a full range of IP applications, including Internet access, Voice over IP (VoIP), streamed media, file transfers (FTP), Virtual Private Networks (VPN), LAN connectivity and satellite-enabled WiFi services. SkyReach services complement existing frame relay and MPLS networks, as well as enabling efficient network management.

Through SkyReach and coupled with its worldwide infrastructure and installation partners, Skynet is one of the only satellite services company in the world that can extend, install and maintain satellite delivered IP connectivity on a truly seamless and global basis. With its tiered SLAs (service level agreements) and quality-of-service features, SkyReach enables a natural extension of terrestrial MPLS systems and a platform for multicast and broadcast video requirements. Skynet is developing relationships and replicating the SkyReach solution on a wide scale where the IP network extension requirement is central.

BtNAccess is headquartered in Reston, VA and Hong Kong, with teams based in Europe, Asia, and the Americas. The company offers fiber and satellite-based business class voice and data solutions, including Hosted PBX and MPLS VPN, to carriers, service providers and enterprises. BtNAccess is a subsidiary of PCCW Limited, a leader in next generation broadband solutions with holdings that include the former Hong Kong Telecom Company.

A pioneer in the satellite industry, Loral Skynet delivers the superior service quality and range of satellite solutions that have made it an industry leader for more than 40 years. Through the broad coverage of the Telstar satellite fleet, in combination with its hybrid VSAT/fiber global network infrastructure, Skynet meets the needs of companies around the world for broadcast and data network services, Internet access, IP and systems integration. Headquartered in Bedminster, New Jersey, Loral Skynet is dedicated to providing secure, high-quality connectivity and communications. For more information, visit the Loral Skynet web site at www.loralskynet.com.

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, Loral Space & Communications Ltd. or its representatives have made or may make forward-looking statements, orally or in writing, which may be included in, but are not limited to, various filings made by the company with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of the company. Actual results could differ materially from those projected or suggested in any forward-looking statements as a result of a wide variety of factors and conditions. These factors include those related to the filing, on July 15, 2003 by Loral and certain of its subsidiaries, of voluntary petitions for reorganization under chapter 11 of title 11 of the United States Code in the United States District Court for the Southern District of New York and parallel insolvency proceedings in the Supreme Court of Bermuda in which certain partners of KPMG were appointed as joint provisional liquidators. Under Loral's proposed Plan of Reorganization, the company's existing common and preferred stock will be cancelled and no distribution will be made to the holders of such stock. A hearing for the court to consider confirmation of the Plan is currently scheduled for July 13, 2005. Additional factors and conditions are also described in the section of the company's annual report on Form 10-K for the fiscal year ended December 31, 2004, entitled "Commitments and Contingencies," and the company's other filings with the Securities and Exchange Commission. The reader is specifically referred to these documents.