Galileo PFI delayed by revenue fears
Euro satnav project wanders off track
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Galileo, the planned European rival to America's Global Positioning System (GPS), is in trouble.
Much of the ambitious project's construction is supposed to be privately funded, and plans call for a united pan-European company to oversee the set-up and running of the Galileo network.
But the various private companies involved so far cannot agree on the details. Delays caused by wrangling have effectively stalled the whole enterprise, with at least a year's delay already, and European Union (EU) officials are attempting to move things forward.
The main corporate players are EADS, the company which owns Airbus and has a substantial share in the controversial Eurofighter; Thales and Alcatel-Lucent from France; Italy's Finmeccanica; Aena and Hispasat of Spain; UK company Inmarsat; and a German alliance led by Deutsche Telekom. Most of these firms have substantial involvement with European national governments, and some commentators have suggested that the usual Euro struggle for national pie-slice is at the root of the trouble.
All this has led Jacques Barrot, the EU transport commissioner, to write firm letters to the companies demanding the reasons for the delays. And Germany, as the current holder of the EU presidency, is attempting to get the weight of the national governments behind the Brussels administration. German transport minister Wolfgang Tiefensee is to chair a meeting of his counterparts next week.
But national jostling for position may not be the whole story. Some are asking why the private sector should sink large sums into Galileo, when it is not clear how much revenue would ensue or who would get it. The current American GPS system is paid for by the US Department of Defense, and is free for users worldwide. This is hard to compete against.
The London Financial Times today quoted an unnamed corporate exec as saying "Why sell Pepsi when you can get Coke for free?" It also suggested that European governments might have to guarantee a revenue stream to get companies to invest, perhaps by requiring emergency services to subscribe to Galileo.
Galileo could offer significant advantages over the existing GPS constellation, however, which customers might pay for. GPS receivers often lose their locating signal where large areas of the sky are obscured, as in built-up areas, and new satellites may be able to eliminate or reduce this problem. Galileo is also intended to offer a paid-for signal accurate to less than 1 metre, which is much superior to ordinary GPS performance. Nonetheless, it is unclear whether or how much people will pay for this added functionality.
It isn't even clear that they will have to pay if they don't want to. GPS, for instance, was originally intended to offer its full accuracy only to US and allied forces, but workarounds were developed almost at once. One of the most popular is so-called "Differential GPS," (DGPS) where the regional error in the publicly-available GPS signal is constantly worked out by a ground station at a known location and transmitted to the DGPS receiver using any of a variety of comms links. Accuracy to rival the new Galileo signal is often achievable, and DGPS isn't hugely complex or expensive to set up.
There may be simpler ways to get Galileo pay functions for free. Galileo test satellites are already in orbit, and the encryption on their signals was cracked almost at once. This is not to say that the same will happen to the main system when and if it goes live, but it seems fairly likely. The situation is much the same as that with high-def DVD; legitimate customers must be able to get the content, so hackers will probably be able to as well.
And there are other foes for Galileo to face. The occasionally-erratic Russian GLONASS constellation has been around for a long time, and the nascent Chinese space industry is said to be moving fast with yet another rival. Meanwhile, other locator-tech solutions such as E-OTD have been implemented using existing mobile masts rather than satellites.
All in all, the Galileo companies' doubts over revenue seem quite understandable. Without a big injection of government cash, the route ahead may be a difficult one to navigate. ®
COMMENTS
Just as expected
As already stated, this is really no surprise at all. I also noted at the time Galileo was announced that there was very little commercial case for such a system but still the EU went ahead with the public delusion that this would be mostly a commercially funded project, etc.
Rubbish, as already pointed out GPS is virtually free and in most case good enough. Unless they do some stupid arm-twisting to mandate this (which is well within the capabilities of the EU) it will go nowhere.
That is not to say I am against Galileo, I think it is valuable to have an alternative to the US for the future and it is of course very beneficial to the EU's industry
But why oh why can't the politicians behind this just be honest and say "We want it for strategic reasons and are willing to pay for that", is that too much to ask? Yes, probably...
Oh gosh, what a non-surprise !
I recall when Galileo was first talked about, I (and many of my friends) simply couldn't see where the business case was.
I can see the 'national security' angle but have to wonder if we can really see the day when Europe falls out with the US to the extent that the US will turn off GPS. I can see certain specific markets where the higher accuracy and accountability would be a benefit. But for the general market I REALLY cannot see a business case.
The US GPS system is well established, receiver designs are mature making them reliable and cheap, a whole variety of equipment is available for just about any conceivable requirement.
To support Galileo will mean new receiver designs (cost), new hardware (cost), additional products to stock, distribute, and market (cost), and just for good measure I understand there is intended to be a licence fee payable for every unit (cost). So for the majority of potential customers they will have a choice of an established and cheap unit for GPS, or a new (risk of more bugs), more expensive unit that does essentially the same thing.
In short, there is no mass market for Galileo unless it is made free to use and free to make/sell receivers for it. As the article points out, if your price point is free, then where is the profit ? No profit potential means that no-one in their right mind will invest for simple business reasons.
Also as the article points out, there may be politically imposed markets IF certain users are forced to use the system. As a private pilot I can tell you that we have been watching with 'interest' to see if our aviation authorities try and stuff us with yet another round of pointless and very expensive equipment upgrades by mandating use of Galileo for aviation use. GPS has proved accurate and reliable for instrument approaches in the US where they have had such procedures for a few years - our CAA has only recently caved in and done trials to see if they'd work here (results not out yet).
If the various governments want this for strategic or security reasons then quite simply they are going to have to pay for it, otherwise there is no business case and it just isn't going to happen !
One's a monopoly, two's company.........?
"The London Financial Times today quoted an unnamed corporate exec as saying "Why sell Pepsi when you can get Coke for free?" ......
Yes, how very prescient. And once addicted to one dealer then they are in a position to do whatever they will with the product.
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