EU's alternative to GPS runs into trouble

European Commission Galileo Web Site

The European Union's plan to launch its own satellite navigation system to rival the United States' Global Positioning System has run into problems.

Galileo originally was estimated to cost just less than $5 billion. But delays in the development of the 30-satellite navigation system are threatening to increase those costs, Jacques Barrot, EU transport commissioner said in a letter sent to the European parliament and to contractors for the project.

Barrot wrote that he feared that the delays will result in significant cost increases and he intends to “to explore alternatives for delivering the project, based on a detailed technical, financial, program management review."

The current contract was originally awarded to a consortium that includes the European Aeronautic Defence and Space Company (EADS), Inmarsat, Thales and others.

Barrot said in his letter that he considered the absence of any signs of progress on Galileo a warning sign that Galileo may not meet the European Union’s plans to start satellite navigation service in 2011. Bitkom, the German information technology industry association, predicted that the Galileo would not go into operation until 2014.

Pedro Pedreira, executive director of the European Global Navigation Satellite System Supervisory Authority, established by the EU to manage Galileo, said in a speech to the Munich Navigation Summit that the development of Galileo has been delayed by failure of the contractors to come to an agreement on the formation of an operating company.

Pedreira said the current ungovernability of the contracting consortium blocks decision-making and puts at risk “Europe’s greatest technological dream, its strategic satellite navigation independence and the vast economic potential that justified the [European] Council decision to invest in the system in the first place.”

Bitkom estimated the value of satellite navigation system products and services to be more than $500 billion through 2025, and said delays in the launch of Galileo would cede competitive advantages to GPS and the Russian Global Navigation Satellite System (GLONASS).

Stratfor, a consulting company, said Galileo development is now hopelessly stalled in a tangle of EU bureaucracy, with GLONASS and the Chinese Beidou satellite navigation systems ahead of Galileo.

EU Referendum, a Web site that tracks Galileo, said the EU also faces another critical problem in developing a satellite navigation system to rival GPS –- the EU plans to charge for precise position and navigation signals delivered by Galileo while GPS signals are free. This could trump any advantage the EU might hope to gain from Galileo, which the EU has trumpeted as strategic alternative to GPS, which is controlled by the U.S. Defense Department, EU Referendum said.

Stratfor agreed, saying “from a business perspective, GPS' reliability and cost to consumers (nothing) have made it the most competitive system.” Stratfor added, that if Galileo fails, GPS will become the international satellite navigation standard by default.

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