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European GSA Market Research Shows Profitable Rewards for Galileo Launch

By | November 23, 2010

      [Satellite TODAY Insider 11-23-10] Demand for Global Navigation Satellite Systems (GNSS) services will be worth $224.5 billion by 2020, according to a study released Nov. 22 by the European GNSS Agency (GSA). The findings aim to provide motivation for the European Commission (EC) to continue investing into the expensive Galileo satellite navigation system, which is being overseen by GSA.
          According to the Market Development Chief Gherardo Calini, the GSA estimates that demand for the core GNSS market will grow at a compound annual growth rate of 11 percent over the next 10 years. The study defines core GNSS markets as only costs that are directly attributable to GNSS services such as chipset, maps and navigation software. Calini said the GSA has been conducting a series of studies aimed at keeping a close watch on the market ahead of the launch of the European equivalent to the U.S. GPS satellite navigation system.
          “We used an econometric forecasting model to forecast that between 2010 and 2020, core GNSS sales will amount to $1.71 trillion. The sales will fall into one of four key categories: road transport and navigation, location-based services, agriculture and aviation,” the GSA said in a statement.
         The report also predicted that GNSS shipments will likely peak at 65 million in 2014, after which, a decline in shipments will begin to trend as smartphones with GNSS capabilities take over from stand-alone satellite navigation devices. Market penetration also is expected to grow from 34 percent to about 90 percent.
          The Galileo project’s budget has been criticized as “too costly,” by recession-conscious organizations. In October, the German government issued a statement outlining its proposal to shrink the costs of programs administered by the European Union (EU) and European Space Agency (ESA) by 500 million to 700 million euros ($696 million to $974 million). The German government said the measures are needed after its own research showed that the program faces further delays and additional costs of between 1.5 billion and 1.7 billion euros ($2 billion to $2.3 billion).
              In May, the European Court of Auditors criticized the project as “ill-prepared and badly managed” and was skeptical that the EC would be able to begin Galileo operations in 2014. Overall, the EC estimates that the Galileo project’s development, construction and operating costs will cost EU taxpayers about 20 billion euros ($27.7 billion) over the next 20 years in development.
          ESA Galileo Program Director René Oosterlinck told Satellite TODAY Insider that everything is going well on the Galileo program, despite recent tension over the program’s budget. “From an ESA perspective the program is going well. The two satellites that are in orbit, GIOVE-A and GIOVE-B are working very well. GIOVE A has been in orbit almost five years. The behavior of the critical technologies on-board these two satellites is very good. There are always some small problems, but we are satisfied. Secondly, the signal generators are working very well. So, we can even transmit all the different signals which is excellent for validating the system.”

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