Europe Launches Two Galileo Satellites to Cut Reliance on GPS

Europe’s Galileo global navigation system launched its first two satellites today as part of a project that may generate 90 billion euros ($124 billion) in economic and social benefits over two decades.

The satellites rode a Russian rocket launched from a space port in Kourou, French Guiana, to an altitude of 23,000 kilometers (14,300 miles), the European Commission said in a statement. While 4.5 billion euros have been allocated to develop and build the system for the period ending in 2013, another 7 billion euros will be needed for the budget cycle through 2020 to finish building the system and keep it operating, said Ingrid Godkin, an official at the commission.

Satellite technology is used for applications including in- car navigation, time-stamping transactions at banks and powering telecommunications. Unlike the Global Positioning System, developed by the U.S. military, Galileo is designed for civil purposes and aims to end Europe’s reliance on GPS. Galileo will also have a commercial, fee-based service for high-precision, guaranteed signals for use in areas including mining, surveying and mapping, which GPS doesn’t offer.

“Europe is now a step closer to having its own smart satellite navigation system, which will bring many benefits to our economies and our daily lives,” the commission said.

The system established may generate 90 billion euros in additional revenue and in public and social benefits over a period of 20 years, the commission said.

‘Guaranteed System’

Galileo also will provide “a guaranteed system that won’t be vulnerable to being shut off for political or military reasons,” Godkin said.

The launch, originally scheduled for Oct. 20, was delayed by 24 hours for technical reasons, the commission said. The satellites are the program’s first to be operational and will test the navigation system in space and on the ground, said Pal Hvistendahl, a spokesman at the European Space Agency, which shared development costs with the commission. The deployment phase has been funded entirely by the commission, the executive arm of the 27-nation European Union.

Successive launches are scheduled to complete the constellation of 30 satellites by 2019. The additional number of satellites Galileo provides, combined with GPS, will also improve the availability of signals in cities and offer better coverage at high latitudes, particularly in northern Europe, according to Godkin.

Free of Charge

Germany’s OHB System AG will build the first 14 satellites, and France’s Arianespace made the launchers. The system will start operating in 2014 and will be available free of charge.

“We are following it closely,” said Kristina Nilsson, a spokeswoman for TomTom NV (TOM2), Europe’s biggest maker of portable navigation devices. “GPS is accurate, but we always track all new technical developments.”

The commission will complete a proposal for the 7 billion euros in funding by the end of the year to be presented to EU governments for approval, Godkin said.

Governments probably will scrutinize the proposed budget more carefully than when Galileo was first conceived over a decade ago because of concern over the economy, said Tomas Valasek, director of foreign policy and defense at the Centre for European Reform in London.

The project probably won’t be shut down, and enough funding will be approved to keep staff employed and provide a minimal return for the manufacturers, he said.

Galileo Funding

“They’ve already poured so much money into it,” Valasek said. “Galileo has already benefited from previously unplanned allocations from the European Commission budget.”

It may be too early to tell how widely Galileo’s signals will be made available to the general public.

“We appreciate the Galileo efforts and are looking forward to seeing the first results,” Nokia Oyj (NOK1V) spokesman Doug Dawson said by e-mail. “We will include Galileo satellites into our system if it will enhance our systems and the user experience.”

Nokia is working with Russia’s version of GPS, Glonass, which was revived last year after funding collapsed along with communism in 1991.

To contact the reporters on this story: Makiko Kitamura in London at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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