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NDP Study Outlines GPS Industry’s Economic Impact

By | June 23, 2011

      [Satellite TODAY Insider 06-23-11] Commercial GPS adoption growth is accelerating and is expected to create $122.4 billion in annual benefits and directly affect more than 5.8 million jobs in the downstream commercial GPS-intensive industries, according to a report released June 22 by Washington, D.C.-based NDP Consulting Group.

          The economic study, conducted by NDP’s Nam Pham and commissioned by the Coalition to Save Our GPS, used the data to launch an attack on 4G LTE network operator LightSquared, regarding its much-heated situation regarding its potential disruption of interference with GPS signals.
         “More than 3.3 million U.S. jobs in agriculture and industries rely heavily on GPS technology,” Pham said in the report. “The disruption of interference with GPS posed by LightSquared’s planned deployment of 40,000 ground stations threatens direct economic costs of up to $96 billion to U.S. commercial GPS users and manufacturers. This figure represents the equivalent of 0.7 percent of the U.S. economy.”
         Pham clarified that the $96 billion figure is the total of up to $87.2 billion in costs to commercial GPS users and up to $8.8 billion in costs to commercial GPS manufacturers. “The study’s analysis is confined to the economic benefits of GPS technology to commercial GPS users and GPS manufacturers and the economic costs of GPS signal degradation to only those sectors. The report therefore does not capture the considerable benefits and costs to consumer users of GPS, other non-commercial users and military users.”
      The study comes one day after LightSquared announced that it entered negotiations with MSS operator Inmarsat to accelerate the schedule for the company to begin using its L-band block frequencies. LightSquared said its own research determined that the lower 10MHz block of the spectrum would not create interference risks as it is located farther away from the GPS frequencies. The company hopes its agreement with Inmarsat will allow the rollout of its wireless network in a timeframe that keeps to its original business plan and is in accordance with regulatory requirements.
           “This is a solution which ensures that tens of millions of GPS users won’t be affected by LightSquared’s launch. At the same time, this plan offers a clear path for LightSquared to move forward with the launch of a nationwide wireless network that will introduce world class broadband service to rural and underserved areas which still find themselves on the wrong side of the digital divide,” said LightSquared Chairman and CEO Sanjiv Ahuja.
          From 2005 to 2010, GPS equipment revenues in North America averaged $33.5 billion per year, with commercial sales accounting for 25 percent of the total. Consumer and military markets made up 59 percent and 16 percent of the total, respectively. The U.S. government has already invested $35 billion in the GPS satellite constellation and continues to invest in GPS at a rate of about $1 billion a year, according to the report.
          “The commercial stakes [of the LightSquared issue] are high. The downstream industries that rely on professional and high precision GPS technology for their own business operations would face serious disruption to their operations should interference occur, and U.S. leadership and innovation would suffer,” Pham said.
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