EUROPEAN COMMISSION 
Brussels, 30.11.2011 
SEC(2011) 1446 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying the document 
Proposal for a Regulation of  the European Parliament and of the Council on further 
implementation of the Eu ropean satellite navigatio n programmes (2014 – 2020)  
 
{COM(2011) 814 final} 
{SEC(2011) 1447 final}  
 
EN 2   EN 
 
EN 3   EN TABLE OF CONTENTS 
Definitions.................................................................................................................... .............. 7  
1. Procedural issues and consulta tion of interested parties.............................................. 9  
1.1. Identification ............................................................................................................ .... 9 
1.2. Organisation and timing............................................................................................... 9 1.3. Consultation and expertise ........................................................................................... 9 1.4. Scrutiny by the Commission Impact Assessment Board ........................................... 11 2. Context ....................................................................................................................... 1 2 
2.1. Europe needs a global navigation sy stem: rationale and added value ....................... 12 
2.2. Governance, financing and legal framework ............................................................. 16 2.2.1. Galileo: Objectives, infrastructure and implementation phases................................. 18 2.2.2. EGNOS: Objectives, infrastructu re and implementation phases ............................... 19 
3. Problem definition...................................................................................................... 20  
3.1. Challenges................................................................................................................ .. 20 
3.2. Evaluations of the GNSS programmes ...................................................................... 20 3.2.1. Galileo 21 3.2.2. EGNOS 23 3.3. The problem that requires action................................................................................ 23 3.4. Who is affected, in what wa ys and to what extent? ................................................... 24 
3.5. Foreseen evolution of the problem............................................................................. 25 3.6. EU right to act ........................................................................................................... . 26 
4. Objectives................................................................................................................... 26  
4.1. General policy objectives........................................................................................... 26 4.2. Specific policy objectives .......................................................................................... 27 4.3. Consistency with other policies and objectives ......................................................... 28 5. Policy options............................................................................................................. 29  
5.1. Policy options for problem 1: Way forward on further implementation and 
exploitation of the European GNSS programmes...................................................... 29 
5.1.1. Galileo 29 5.1.2. EGNOS 31 5.2. Policy options for problem 2: Governan ce scheme for the exploitation of both 
Galileo and EGNOS systems ..................................................................................... 31 
 
EN 4   EN 5.2.1. Identification of functions to be performed during exploitation phase...................... 32 
5.2.2. Organisation of the program me management functions ............................................ 33 
5.2.3. Political supervision................................................................................................... 34 
5.2.4. Options for programme management......................................................................... 34 5.3. Summary ................................................................................................................... . 35 
6. Analysis of impacts.................................................................................................... 37  
6.1. Analysis of impacts for problem 1: Wa y forward on further implementation and 
exploitation of the European GNSS programmes...................................................... 37 
6.1.1. Analysis of benefits.................................................................................................... 37 
6.1.2. Direct revenues 41 6.1.3. Analysis of costs 42 6.1.4. Sector-specific impacts .............................................................................................. 43 6.2. Analysis of impacts for problem 2: Govern ance scheme for the exploitation of both 
Galileo and EGNOS systems ..................................................................................... 46 
6.2.1. EU Regulatory agency ............................................................................................... 46 6.2.2. EU public company.................................................................................................... 48 7. Comparing the options ............................................................................................... 49  
7.1. Comparing the options for problem 1: Way forward on further implementation and 
exploitation of the European GNSS programmes...................................................... 49 
7.2. Comparing the options for problem 2: G overnance scheme for the exploitation of 
both Galileo and EGNOS systems ............................................................................. 53 
8. Monitoring and evaluation ......................................................................................... 55  
8.1. Indicators................................................................................................................ .... 55 
8.2. Monitoring and evaluation ......................................................................................... 55 9. Annexes...................................................................................................................... 57  
Annex I - Overview of the Mid-term review of the European satelli te radio navigation 
programmes (COM(2011) 5 final)............................................................................. 58  
Annex II - Overview of the stakeholder consultations............................................................. 59  
Annex III - Studies and articles............................................................................................... .6 1 
Annex IV – Sector-specific impacts......................................................................................... 62  
Annex V - EU publications on GNSS...................................................................................... 81  
Annex VI: GNSS Market Monitoring a nd Forecasting Tool: Methodology ........................... 88  
Annex VII – Performance maps............................................................................................... 94  
 
EN 5   EN Annex VIII – Galileo SoL se rvice re-profiling ........................................................................ 95  
 
TABLE OF FIGURES 
Figure 1: Overall schedule of the implementation of the Galileo programme......................... 21 
Figure 2: Functions of political supe rvision and programme management ............................. 33 
Figure 3: Overview of policy options ...................................................................................... 35 Figure 4: Value-chain of industries affected by the GNSS programmes................................. 44 
Figure 5: Clustering of infrastructure options used to review sector-specific impacts............ 44 
Figure 6: Review of identifi ed positioning, navigation and timing applications in Road 
transport market............................................................................................................... ......... 72 
Figure 7: Assessment of Galileo’s impact on Road Segment – Focus on product enabled 
market......................................................................................................................... .............. 73 
Figure 8: Typology of road applications .................................................................................. 74 Figure 9: Typical value chain by typology of application ....................................................... 74 
Figure 10: Structure of the MMFP........................................................................................... 88 Figure 11:  List of sector-specific assumptions used  in MMFP (example of LBS sector). ...... 89 
Figure 12: List of global assumptions used in MMFP............................................................. 90 Figure 13: Mapping of public benefits with GNSS applications in road transport.................. 92 
Figure 14: Example of calculation of public be nefits: time savings in road transport............. 92 
Figure 15: List of assumptions used in Public  Utility Model (example of LBS sector).......... 92 
Figure 16: Performance map for option (4 )  Galileo horizontal accuracy [m] ........................ 94 
Figure 17: Performance map for option (3 )  Galileo horizontal accuracy [m] ........................ 94 
Figure 18: Performance map for options (1)  and (2) Galileo horizontal accuracy [m] .......... 94 
 
TABLE OF TABLES 
Table 1: Policy options for problem 1...................................................................................... 30 Table 2: Simulated navigation accuracy per Galileo infrastructure option.............................. 38 
Table 3: Availability of servic es per infrastructure options..................................................... 38 
Table 4: EGNSS indirect benefits per option – 2014-2034 ..................................................... 40 
 
EN 6   EN Table 5: EGNSS potential di rect revenues per option ............................................................. 42 
Table 6: European GNSS progra mmes costs per option 2014-2034 ....................................... 43 
Table 7: Summary of the competitivene ss impact ................................................................... 46 
Table 8: Compliance with general policy objectives ............................................................... 49 Table 9: Cost-benefit analys is of policy options: 2014-2034 .................................................. 50 
Table 10: Effectiveness – Efficiency – Coherence comparison for problem 1........................ 51 
Table 11: Effectiveness – Efficiency – Coherence comparison for problem 2........................ 54 
Table 12: Indicators........................................................................................................... ....... 55 
Table 13: Sector-specific analysis  of competitiveness impacts ............................................... 65 
   
 
EN 7   EN DEFINITIONS  
Commission European Commission 
Council Council of the European Union 
CS Commercial Service 
DG  Directorate-General of the European Commission 
E0 Entity responsible for political supervision 
E1 Single entity responsible for programme management 
EASA European Aviation Safety Agency 
EDAS EGNOS Data Access Service 
EGNOS European Geostationary  Navigation Overlay Service 
EGNSS European Global Navigation Satellite System 
ESA European Space Agency. The ESA comprises 18 countries, 
two of which – Norway and Switzerland – are not EU Member States. Canada, Hungary, Poland and Romania take part in some cooperation projects with the ESA. 
EU European Union 
European GNSS programmes Galileo programme and EGNOS programme 
FOC Full Operational Capability (of the Galileo system) 
GDP Gross Domestic Product 
GJU Galileo Joint Undertaking  
GLONASS Global'naya Navigatsionnay a Sputnikovaya Sistema: a radio-
based satellite navigation system operated by the Russian government 
GMES Global Monitoring for Environment and Security 
GNSS Global Navigation Satellite System 
GNSS Committee European GNSS Prog rammes Committee established by 
Article 19 of the Regulation (EC) No. 683/2008  
GNSS Regulation Regulation (EC) No. 683/2008 of the European Parliament 
and the Council on the furt her implementation of the 
European satellite naviga tion programmes (EGNOS and 
Galileo) 
 
EN 8   EN GPS Global Positioning Service: a radio-based satellite navigation 
system operated by the US government 
GSA European GNSS Agency 
ICAO International Civ il Aviation Organisation 
IGO Inter-governmental organisation 
IOC Initial Operational Capab ility (of the Galileo system) 
IOV In-Orbit Validation 
ITU International Telecommunications Union  
ITU International Telecommunication Union 
Member States Member States of the European Union 
MFF Multi-annual financial framework 
MRD Mission Requirements Document 
OS  Open Service 
PND Personal Navigation Device 
PRS Public Regulated Service 
SAR Search and Rescue Service 
SBAS Satellite-Based Augmentation System 
SoL Safety of Life Service 
 
 
 
EN 9   EN 1. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
1.1. Identification  
Lead DG:     Enterprise and Industry 
Other involved DGs: Agenda Planning/WP Re ference:  2011/ENTR/003 
1.2. Organisation and timing 
This impact assessment accompanies a legislat ive proposal for a Regula tion of the European 
Parliament and of the Council on the furthe r implementation of the European satellite 
navigation programmes (2014 – 2020). It follows th e adoption of the mid-term review of the 
European satellite radio navigation programmes
1 in January 2011 that evaluates the current 
regulatory set-up and sets out the challenges ahead. 
To make the most of the expertise available in other services of the Commission the impact 
assessment was elaborated in consultation with a steering group consisti ng of representatives 
of the following Directorate-Generals: SG, SJ, MOVE, ENER, BUDG , RTD, INFSO, JRC, 
HR, ENTR2. The steering group met five times (11th January, 14th February, 15th March, 15th 
April, and 27th June 2011) and was consulted on and agr eed with the draft submitted herewith.  
1.3. Consultation and expertise 
Consultation of external stakeholders This impact assessment is based on a number of consultations with a va riety of stakeholders 
carried out between 2007 and 2011 on topics related to the European  Global Navigation 
Satellite Systems  (GNSS) . The extensive consultation process targeted different stakeholders 
and took various forms including: 
• Thematic workshops and conferences w ith users of the future services; 
• Interviews with members of the European  GNSS programme committee, representatives 
of industry associations, experts from the downstream industry, experts from the European 
Space Agency and experts from the European GNSS Agency;  
• Targeted working groups with participation of experts from the European Space Agency, 
experts from the European GNSS Agency a nd representatives of the GNSS programme 
committee. 
Stakeholders were consulted on te chnical and legal issues, options  for the provision of future 
services, marketing, cost evolution, risk analysis  to options for future governance schemes.  
Additionally, the general public  was consulted through:  
                                                
 
1 COM(2011) 5 final. Report from the Commission to the European Parliament and the Council. Mid-term 
review of the European satellite radio navigation programmes. See Annex A for an overview of the Report. 
2 Full list of Commission directorates-general and services abbreviations: http://publications.e uropa.eu/code/en/en-
390600.htm    
 
EN 10   EN • The Eurobarometer survey in June 20073 which  questioned around 26 000 citizens all 
over the European Union on a ra nge of issues linked to Galil eo and satellite positioning 
systems in general; 
• The Eurobarometer survey in July 20094 which questioned around 25 000 citizens in the 
European Union on space activities, includ ing the importance of developing an 
independent positioning system in Europe; 
• A public consultation on a possible EU Space Programme in January - March 20115 on 
space policy, including the importance of im pact to major satellite based services. 
Key findings 
• The majority of respondents to the two Eurobarometer surveys expressed their support to  
continue developing an independent sa tellite navigation system for Europe (80% in 
2007 and 67% in 2009 of all questioned respondents); 
• The awareness on the increasing reliance on satellite navigation services is growing , 
not only within the industry and the academia6, but also among genera l public: 86% of all 
questioned respondents in the open consultation on possible EU Space Programme is concerned about a disruption/losses in  satellite navigation services;  
• Industry experts and representa tives of public administrati ons have re-emphasised the 
need for stable, long term governance for the European GNSS Programmes , 
highlighting a number of changes in the set- up over the past ten years and their negative 
consequence on the deployment of the programme; 
• Concerning technical features  of the European GNSS, main feedback aims at reviewing 
the Galileo Safety of Li fe service (SoL) concept:  some key Safety of Life service 
features such as the limited level of interope rability with other GNSS systems and existing 
ICAO and Eurocontrol standards
7 are perceived as hindering a wide adoption by key 
stakeholders  in the civil aviation . This strong position adopte d by this community calls 
for a redesign of the Galileo SoL concept; 
• EGNOS safety-of-life  service having been declared opera tional, stakeholders in the civil 
aviation insist on a long term stable commitment of the European  Union  as the owner 
responsible for maintaining this  infrastructure so as they can engage in investments to 
adapt aviation infrastructure and processes to the existence of EGNOS. 
List of consultation events can be found in the Annex II. 
External expertise  
This impact assessment is also based on a number of external studies and articles (a complete 
list can be found in Annex III). It builds primarily on the position papers on requirements for satellite navigation systems from user communities
8, the 'Exploitation study' assessing the 
                                                 
3Flash Eurobarometer 211/2007: http://www.gsa.europa.eu/index. cfm?objectid=6BA4CAC6-A37E-B230-
87DB16533E07D8D7   
4 Flash Eurobarometer 272/2009: http://ec.europa.eu/public _opinion/flash/fl_272_en.pdf   
5 Public consultation on a possible EU Space Programme: http://ec.europa.eu/enterprise/policies/space/esp/public-
consultation/index_en.htm   
6 Global Navigation Space Systems: reliance and vuln erabilities (2010), UK Royal Academy of Engineering 
7 Eurocontrol Policy on GNSS for Navigation Applica tions in the Civil Aviation Domain, SCG/8/AP10, 
28.04.2008 
8 Position papers from the user communities (2009, 2010): International Civil Aviation Organisation (ICAO), the 
European Organisation for the Safety of Air Navigation (Eurocontrol) and COSPAS-SARSAT an 
 
EN 11   EN future evolution of the Eur opean GNSS programmes after 20139 and a number of studies and 
articles on dependency on GPS10.  
Ex-post evaluations 
This impact assessment also builds on th e two successive evaluations: firstly, on the 
assessment of the Galileo programme's developm ent phase until 2008 carri ed out by the Court 
of Auditors11 and secondly, on the evaluation of bot h the Galileo and EGNOS programmes 
since 2008, when the Commission took over as programme manager, i.e. the mid-term review 
of the European Satellite radio navigation programmes.12 The results of those evaluations, 
their recommendations and the way they were taken forward are described in section 3.2. 
Other related impact assessments 
In 2010, the Commission published an impact a ssessment which accompanied the Action Plan 
on global navigation satellite system applica tions. It focused on assessing the impact of 
different EU actions to support the increase of  satellite navigation downstream applications 
for users.13  
A separate impact assessment on the liability issues will be carried  out by the European 
Commission by the end of 2011 to assess different liability regi mes linked to the exploitation 
of the European GNSS programmes. This impact  assessment will build on the present one as 
it will depend on the chosen governance scheme.  
1.4. Scrutiny by the Commission Impact Assessment Board 
The Impact Assessment Board of the European  Commission assessed a draft version of the 
present impact assessment and issued its opinion on 2nd September 2011 The Impact 
Assessment Board made several recommendati ons in strengthening the link between the 
objectives and problem drivers,  making better use of the evaluation findings, demonstrating 
better the EU added value, be tter explaining the scope of the options and improving the 
description of the methodologies used for assessing the impacts. 
In the light of the latter, th e final impact assessment report: 
The report takes those recommendations on board by improving the intervention logic 
between objectives and problem drivers in chapters 3 and 4, by improving the description of 
the EU-added value in chapter 2.1, by explaining  the scope of the options in chapter 5 and 
improving Annex VI on methodologies used.  
                                                                                                                                                         
intergovernmental organisation for search and rescue, primarily on the requirements and expectations of users on 
the quality of services 
9 Exploitation Study (2009), Roland Berger Strategy Consultants, commissioned by the European Commission 
10 See list in Annex III. 
11Court of Auditors special report 7/2009. This report contains a clear overview of the governance and financing 
flow of the Galileo and EGNOS programmes during 1999-2007. 
12 COM(2011) 5 final of 18.1.2011 on Mid-term review  of the European Satellite radio navigation programmes 
13  COM/2010/0308 final of 14. 6. 2010. Communication from the Commission to the Council, the 
European Parliament, the European Economic and So cial Committee and the Committee of the Regions 
- Action Plan on Global Navigation Satellite System (GNSS) Applications SEC(2010)716 
SEC(2010)717 
 
EN 12   EN 2. CONTEXT  
2.1. Europe needs a global navigation system: rationale and added value 
Rationale 
Knowledge of highly reliable and accurate information on pos ition, velocity and time is 
fundamental to improving efficiency in many areas of our economy and daily lives. The 
experience of the US GPS (Global Positioning Sy stem) has demonstrated the advantages of 
satellite navigation to the extent that it is  regarded in the USA as the fifth utility14, alongside 
water, electricity, gas and telephone. The US military and civil users have developed a considerable dependence on the GPS. The military are reliant, to a significant extent, on satellite navigation as an aid to effective comm and and control. Civil applications are steadily 
increasing, especially for personal use in ve hicles and mobile phones, and many utility 
networks for telecommunications or energy are also more and more relying on the precise 
time synchronisation provided by the satellite navigation systems.  
 As the use of and the dependence on satellite navigation spreads
15, the prospect to revert to 
traditional positioning and timing methods becomes more and more difficult. The 
implications16 of a disruption of satellite navigation se rvices are even grea ter, jeopardising not 
only the efficient running of tr ansport but also human safety17.  
Several countries have become aware of th eir dependence and are now building there own 
Global Navigation Satellite System (GNSS) . With the launch of the first Chinese 
COMPASS satellite in 2007, the fourth global competitor in the GNSS market emerged after 
US GPS, Russian GLONASS (Global'naya Navi gatsionnaya Sputnikovaya Sistema) and the 
European Galileo programme. The Chinese COMPASS is expected to be completed between 2015 and 2020
18.  At the same time regional systems19 are developed by India and by Japan. 
                                                 
14 The White House, Office of the press secretary. Press briefing by Assistan t Secretary of Transportation, Gene 
Conti, 1 May 2000 
15 Exploitation Study (2009) 
• Personal Navigation Device (PND) penetration rate in cars was 0% before 2000,  reached 36% in 2011 and should 
reach 80% by 2015. In vehicle PND penetration rate was 0% before 2000, reached 10% in 2011 and will continue 
to growth to 50% by 2025 (Source Gartner, LEK) 
• Mobile devices sales to end users are expected to reach 1,7 billion by 2011 worldwide. Smartphones are expected 
to represent 1/3 of mobile devices sales in 2011. GNSS penetration rate in  2020 is around 24% and would climb to 
50 à 65% in 2020 of overall mobile  phone sales  (Source Gartner, LEK)  
16 Global Navigation Space Systems: reliance and vulner abilities (2010), UK Royal Academy of Engineering, 
http://www.raeng.org.uk/news/publications/l ist/reports/Global_Navigation_Systems.pdf 
17 Why Europe needs Galileo, 2010, European  Space Agency 
18 "The less known, but crucial elem ents of the European Space Flagship  Programmes: Public Perception and 
International Aspects of Galileo/EGNOS and GMES",  European Space Policy Institute, Report 34, May 
2011 
19 Regional systems provide additional signals from satellites operating over a given geographical area that are 
compatible with one or more GNSS systems. Regional satellite positioning systems proposed or under development include: The Indian Regional Naviga tion Satellite System (IRNSS)  will include three 
satellites in geostationary orbit and four satellites in  geosynchronous orbit, transmitting L-band and S-
band signals and providing coverage primarily for the Indian land mass. The first satellite is planned for 
launch in mid-2009 and a complete constellation currently scheduled to be in place by 2011. The 
QZSS, the Quasi-Zenith Satellite System (Japan)  proposes three inclin ed geosynchronous orbit 
(IGSO) satellites operating over Japan and surround ing areas and transmitting signals that are 
compatible and interoperable with existing and future modernized GPS signals. First launch is not 
expected late in 2010 (source: Inside GNSS 
http://www.insidegnss.com/aboutregional ) 
 
 
EN 13   EN Nowadays satellite navigation users in Europe have no alternative than to use the satellite 
signals from the US GPS or GLONASS  for positioning and navigation. The European 
dependence on the satellite radio navigation provid ed by the GPS is estimated to represent 6% 
to 7% of the GDP of EU-27, i.e. € 800 billion in the European Union.20 Yet the military 
operators of these systems can give no guarant ee to maintain an uninterrupted service. 
Consequently, the European economy is increasi ngly relying on a military infrastructure not 
controlled by Europe and not primarily de signed to serve European economic purposes. 
Furthermore, these systems experience a poor ava ilability particularly in densely populated 
urban areas21. Also, they do not provide sufficient guarantee for quality and continuity of 
service to European civilian users.  
Political objectives 
With GPS being fully operational in the early  1990s, the European Union saw the need for 
Europe to have its own globa l satellite navigation system22. Long before the wide 
dissemination of the Personal Navigation Device s (PNDs), the Council and Parliament have 
foreseen an increased need for navigation. The European independence in satellite 
navigation was the primary driver behind this endeavour.  This political objective had the 
following goals: 
• To set up a first global satellit e navigation system completely independent of other 
existing systems  under civilian control , which would guarantee uninterrupted GNSS 
services and a strategic advantage for Europe. However, as became clear later, interoperability with other systems, in part icular with the US GPS, would need to be 
pursued;
23 
• To reinforce the resilience of the Europ ean economic infrastructure by providing a 
backup system in case  of signal failure  from other systems; 
• To maximise socio-economic benefits  for European civil society relying on more 
accurate, available and robust signal by expl oiting the new opportunities generated by 
high-precision satellite navigation to a much  fuller extent than currently possible;  
• To demonstrate Europe's ability to develop , deploy and operate complex large-scale 
space infrastructures.   
                                                                                                                                                         
 
 
 
 
20 COM(2010)308 of 14.6.2010, Impact assessm ent, accompanying document to  the Communication of the 
European Commission on Action Plan on Global Na vigation Satellite System (GNSS) Applications.  
The size of economical activities that rely on GNSS is conservatively estimated as 6-7% of the whole 
GDP of the European Union (ca €800 bn), which highlights the intrinsic value of GNSS for the 
economy and, therefore, the importance of securing its supply. The estimation is based on a number of 
US studies assessing the reliance of various industry sectors on GNSS technology, in particular a study elaborated by the George Washingt on University which measured their combined contribution to USA 
GDP as a total of $1342 bn, which represent around 9.5% of USA GDP in 2009.  A similar calculation 
was carried out for the EU-27 region, based on a contribution of various industries impacted by GNSS 
to the GDP, which resulted in the im pact potential of 6-7% of EU GDP. 
21 Study into the impact on capability of UK commercial and domestic services resulting from the loss of GPS 
signals (2001): http://www.ofcom.org.uk/static/a rchive/ra/topics/research/topi cs/other/gpsreport/gps-report.pdf     
22 Council Resolution on the European contribution to the development of a Global Navigation Satellite System 
(GNSS) of 19 December 1994 
23 International Agreement of June 2004 on the promotion, pr ovision and use of Galileo and GPS satellite-based navigation 
systems and related applications  
 
EN 14   EN  
 Added value 
The added value of the European GNSS lies not only in ensuring Europe’s independence with 
regard to a critical technology but also in s ecuring important macro-economic benefits for the 
European Union, catalysing the development of  new services and products based on GNSS 
and generating technological spin-offs benefici al for research, development and innovation
24.   
The European satellite navigation policy25 is based on these goals and aims at providing the 
EU with two satellite navigation syst ems, established under EGNOS and Galileo 
programmes:  
• The first satellite navigation system, the European Geostationary Navigation Overlay 
Service  (EGNOS) , is a satellite based augmentation system26 that transmits information 
on the reliability and accuracy of the positioni ng signals sent out by US  GPS or Galileo in 
the future. The added value of EGNOS lies in improving the signals and making them 
suitable for safety critical applications such  as Aviation and Maritim e navigation services, 
over the European area27. 
• The second satellite navigation system established under the Galileo programme, will be 
the first global satellite navi gation and positioning infrastructu re specifically designed for 
civilian purposes independent  from other existing or  potential systems.  
In comparison to the existing US GPS system  today, the users of Galileo system will 
have: 
1. Better precision in navigation: In a comb ined GPS-Galileo use (compared to GPS by 
itself) the higher number of sate llites available to the user  will offer higher precision. 
From most locations, six to eight Galileo sate llites will be visible which, in combination 
with GPS signals, will allow positions to be determined up to within a few centimetres. 
 
                                                 
24 A detailed analysis was presented in the Commission Communication on the status quo of the Galileo and 
EGNOS programmes published in 2007 (COM(2007)261 final and COM(2007)534/2). 
25 Defined in the GNSS Regulation  
26 Augmentation systems are designed to improve one or more qualities of a GNSS system or systems, such as 
accuracy, robustness, and signal availability. Satellite-based augm entation systems (SBAS) augment 
core satellite constellations by providing ranging, inte grity and correction information, which increase 
accuracy, reliability, and availability of GNSS pos itioning. SBAS information is broadcast via 
transponders on geostationary satellites in the same band as the core constellations. The elements of an SBAS system typically include a network of ground reference stations that monitor satellite signals; 
master stations processing reference stations data and generating SBAS signals, and uplink stations to 
that transmit the messages to the geostationary satellites. Several commercial SBAS systems are providing services to users, including OmniSTAR (Fugro, The Netherlands), Starfire (NavCom 
Technology, United States), and Veripos (Subsea 7, United Kingdom). There are four non-commercial 
SBAS: Wide Area Augmentation System (WAAS), USA, European Geostationary Navigation Overlay 
Service (EGNOS), Europe, GPS Aided GEO Augmented Navigation (GAGAN), India, MTSAT (Multi-
functional Transport Satellite) Satellite Based Augm entation System (MSAS), Japan (source: Inside 
GNSS, http://www.insidegn ss.com/aboutregional). 
27 The European area for the EGNOS sy stem is the area of 44 members stat es of the European Civil Aviation 
Conference.  
 
EN 15   EN 2. Better availability of the signals: The hi gh number of satellites will also improve the 
availability of the signals in  high-rise cities, where buildin gs can obstruct signals from 
satellites that are low on the horizon. 
 
3. Better coverage by the signals: Galileo will also provide a better coverage at high 
latitudes than GPS, thanks to the location and inclination of the satellites. This will be 
particularly interesting for Northern Europe. 
 The independence of the Galileo system needs to  be underlined as it is the main political 
objective in setting up this sy stem (for a technical details  see chapter 6.1.1.1). However, 
interoperability of this system with other exis ting or future satellite navigation systems and in 
particular with the US GPS is an important added value. Once Galileo  is operational, the 
market users will take advantage of the inte roperability and multiplication of the satellite 
navigation systems with increased reliability an d precision, and most re ceivers will operate 
using data from several systems. Moreover, users need back-up systems in case of system failure or voluntary interruption of signals, hence the value added of a civilian system.  
 
Political position on the European GNSS 
Both EGNOS and Galileo have constantly been reaffirmed as key programmes for Europe by 
the Council of the European Union and the Eu ropean Parliament ove r the past ten years
28.  
In March 2011 the Council adopted its Conclusions on the Mid-term review29 in which it:  
− "Underlines that the European satellite navigation systems are of strategic importance for 
the independence of the European Union regarding satellite navigation, positioning and 
timing services [...]; 
− Stresses that, as EU flagship programmes in  space, EGNOS and Galileo would allow the 
development of a strong and innovative downs tream application market in Europe and 
will significantly contribute to the economic recovery of Europe [...]; 
− Reaffirms its strong commitment in favour  of the European satellite navigation 
programmes (EGNOS and Galileo), emphasizes th e need for a timely deployment of a 
competitive and independent Galileo conste llation and acknowledges  the substantial 
economic and social benefits for the European Union and its citizens" 
On 8 June 2011, the European Parliame nt adopted an ow n-initiative report30 in response to the 
mid-term review of the GNSS programmes31 in which it: 
− "Emphasises the strategic importance of sp ace policy and the GNSS programme in the 
drive to establish a genuine European industr ial policy based on prac tical projects with 
tangible benefits for the public and for business […]; 
− Points out that long-term stabi lity is important in order to minimise additional delays, 
costly redesign and destabilisation of the user base […];  
                                                 
28 See Annex V, section on Council resolutions and decisions and Parliament resolutions 
29 Council Conclusion of 31 March 2011 on the Report from the Commission to the European Parliament and the Council 
Mid-term review of the European satellite radio navigation programmes  
30 INI/2009/2226, Report on the mid-term review of the European satellite navigation programmes: 
implementation assessment, future challenges and financing perspectives. Committee on Industry, Research and Energy. Rapporteur: Vladimír Remek. 
http://www.europarl.europa.eu/oeil/FindByPro cnum.do?lang=en&procnum=INI/2009/2226 
31 Idem footnote 12 
 
EN 16   EN − Considers that Galileo and EGNOS, as Eur opean programmes owned by the EU which 
address a public interest at EU level, should mainly be fin anced through the EU budget;  
believes that – alongside the c ontribution from the EU budge t – all possible sources of 
financing should be investigated, incl uding innovative forms of financing […];  
− Believes that the long-t erm governance and management structure of GNSS should 
address the division of task s and responsibilities between the Commission, the GSA and 
the European Space Agency, as well as other relevant issues, such  as appropriate cost-
sharing, the revenue-sharing mechanism, the liability regime, pricing policy and the possible involvement and contribution of th e private sector in the GNSS programmes 
[…]; " 
More information on related EU policies can be found in section 4.4.  
2.2. Governance, financing and legal framework 
Origins of Galileo and EGNOS In 1999 the Council called on the Commission to develop a global system managed by public 
civil authorities
32, and in 2001 the Council approved to  launch the European satellite 
navigation programme Galileo33. The Council decided that the deployment and exploitation 
phases of Galileo would be based on a Public-P rivate-Partnership whereby the EU would pay 
for a third of the cost of the system. In 2002 a dedicated organisational structure, the Galileo 
Joint Undertaking (GJU), was set up by th e Commission and the European Space Agency 
(ESA) to create a common management and f unding platform for the Galileo programme. The 
Galileo Joint Undertaking carried out concession  negotiations with a consortium of private 
companies to establish a Public-Private Part nership. These negotiations did not succeed in 
2007 as a result of unwillingness of the priv ate sector to accept the most important 
programme risks, namely desi gn and market-related risks.34 By the end of 2006, the European 
GNSS Supervisory Authority35 (GSA), replacing the GJU, had been set up to manage the 
public interest aspects of the European GNS S programmes. The European Space Agency 
carried the responsibility over the manage ment and implementation of the GNSS 
programmes, with a combined fundi ng of the EU and ESA of € 2.8 bn. 
In November 2007 the Council reached conclusi ons on the future development of Galileo, 
specifically on the governance an d procurement aspects. It was agreed that the public 
governance of the programmes should be  based on the principle of  a strict division of 
responsibilities between the European Union, represented by the Commission, the GSA and 
the ESA.  
In the meantime, EGNOS was developed under joint effort by the European Commission, 
Eurocontrol and ESA between 1995 and 2007 with  the support of the European industries 
gathered in the EGNOS Operator and Infrastructure Group (EOIG).  
                                                 
32 Council Resolution of 19 July 1999 on the involveme nt of Europe in a new generation of satellite 
navigation services - Galileo-Definition phase, OJ C221 of 3.8.1999 
33 Council Resolution of 5 April 2001 on Galileo, OJ C175 of 30. 5. 2001 
34 As the Court of Auditors concluded in its report (Court of Auditors special report 7/2009), the management of 
the Galileo programme's development phase (until 2008) was inadequate: the Galileo Joint Undertaking was not 
a strong programme manager, it did not achieve most of its objectives, the programme lacked a strong strategic 
sponsor and supervisor, and the Member States given th eir different expectations intervened mostly in the 
interest of their national industries. 
35 Regulation (EC) 1321/2004 
 
EN 17   EN Galileo and EGNOS - EU programmes 
In 2008 the Regulation (EC) No 683/2008  on further implementation of the Galileo and 
EGNOS programmes  (GNSS Regulation ) was adopted. It entrusted the Commission the 
responsibility for managing th e Galileo and EGNOS programmes with full EU funding. The 
Commission signed a delegation agreemen t with the ESA in 2008 on the further 
implementation of Galileo assigning the role of a Design and Procurement Agent to ESA. For 
the EGNOS programme, in 2009 the Commissi on signed a contract with a consortium 
European Satellite Services Provider (ESSP-SAS)  to manage operations and maintenance of 
the EGNOS system. Given the role of the Eu ropean Commission under  the new governance 
scheme, the need for a separate authority to ma nage the public interest disappeared. This led 
to the re-profiling of the role of the GSA towards mainly the security domain and the 
preparation of the market entry of EGNOS and Galileo. 
With the GNSS Regulation the European Union became the sole  political body in charge 
of setting the European GNSS policy.  The Commission, acting on behalf of the EU, 
prepares and submits to Council and Parliament st rategic orientations to  be pursued, prepares 
on behalf of the EU functi onal requirements, proposes budget of the programmes to the 
budget authority and executes accordingly all the activities required to manage the 
programmes. It is however to be noted that th e governance of system security issues departs 
from this general scheme, as Council and Member States are directly invo lved in the security 
related decision making process. 
The specificity and the novelty of this set-up need  to be underlined: it is the first time that the 
European Union is fully responsible for and owns any large scale infrastructure , notably 
a space system36. As such, the European GNSS are the first tangible building blocks of a 
European Space policy. 
The GNSS Regulation sets out the EU funding to both Galileo and EGNOS programmes for 
2007-2013 which amounts to € 3.4 billion. This budge t has been split across the three main 
activities, namely completion of the Galileo development phase (accounting for around € 600 million), the Galileo deployment phase (€ 2.4 billion) and the opera tion of EGNOS (around 
€ 400 million). 
The GNSS Regulation also defines the objecti ves of the Galileo and EGNOS programmes, 
their respective infrastructure and their de velopment phases as outlined in the following 
sections. 
EU Budget proposal:  multiannual financial framework 2014-2020 
The Commission adopted an ove r-arching proposal for the next multiannual financial 
framework for the EU Budget 2014-2020
37 on 29 June 2011. This proposal states that the 
European GNSS programmes will continue to be financed fully from the EU budget. The analysis of other sources of financing was done in the Commissi on Staff working paper 
accompanying the budget proposal
38. It is proposed that the ceili ng for the European satellite 
navigation programmes from the EU budget for the period 2014-2020 is EUR 7 000 million.   
                                                 
36 For example, in the case of the Global Monitoring for Environment and Security programme (GMES), the 
system consists of Member States and EU assets, not requiring a centralised decision making body. 
37 COM(2011) 500 of 29.6.2011 "A Budget for Europe 2020"  
38 SEC(2011) 868 of 29.6.2011 Commission Staff working paper: A Budget for Europe 2020: the current system 
of funding, the challenges ahead, the results of stakeholders consultation and different options on the 
 
EN 18   EN 2.2.1.  Galileo: Objectives, infrastructure and implementation phases  
The objective of the Galileo programme, as refe rred to in the GNSS Regulation, is to offer 
five services with distinct characteristics: 
• the Open Service (OS), for mass-market applications, will provide freely accessible 
signals for timing and positioning; 
• the Safety-of-Life service (SoL ) for increasing safety and efficiency in air and maritime 
transport, will improve the OS performance through the guaranteed provision of timely 
warnings when certain margins of accuracy  are not met (signal integrity messages); 
• the Commercial Service (CS) , for market applications re quiring higher performance and 
robustness than offered by the OS, will provide  encrypted protected signals for protection 
of added value services (on payment of a fee); 
• the Public Regulated Service (PRS) , for a robust and access-controlled service for 
government applications,  will be operational at all times and in all circumstances and uses 
robust encrypted signals, which protects it against interferen ce or disruptions; 
• the Search and Rescue service (SAR) , for the international c ooperative effort on the 
humanitarian search and resc ue, defined in cooperation with the International Satellite 
System for Search and Rescue organisa tion (COSPAS-SARSAT), will allow several 
important improvements in the existing system, e.g. near real-time reception of distress 
messages and very precise location of alerts. 
To define these services, the Commissi on, with the support of ESA, drew up the Galileo  
Mission Requirements Document  (MRD)39, based on extensive iterative consultation with 
end-user communities40. The Galileo MRD provides details on each service, their 
implementation, verification and operational requirements to be delivered by the Galileo 
Satellite Navigation System. This document is c onsistent with the Galileo Mission High Level 
Definition document (HLD)41 which presents the main characteristics of the Galileo 
programme and describes the services and pe rformances offered by the Galileo system. 
In order to deliver the five servi ces, Galileo will consist of the following infrastructure : 
• Space infrastructure consisting of a constellation of 30 sa tellites in medium earth orbit, 
27 operational satellites and 3 spares, to emit signals needed for provision of services, 
• Ground infrastructure consisting of the ground control segment for the operations and 
control of the satellite constellation and a ground mission segment for the processing of 
data delivered from a set of globally distribut ed sensor stations a nd the generation of the 
navigation messages.  
 
Building up the infrastructure and provi sion of services is divided into three phases42: 
                                                                                                                                                         
main horizontal and sectoral issues. Accompanying the document to the Communication from the 
Commission A Budget for Europe 2020 COM(2011) 500 of 29.6.2011 
39 The Galileo MRD is an internal Commission document. 
40 Galileo Justification for Mission Requirements  Document, an internal Commission document. 
41 http://ec.europa.eu/dgs/energy_transp ort/galileo/doc/galileo_hld_v3_23_09_02.pdf 
42Art (3) Regulation (EC) No 683/2008 of the European Parliament and of the Council of 9 July 2008 on the 
further implementation of the European satellite navigation programmes  
 
EN 19   EN • The development phase , aiming at reaching In Orbit Va lidation (IOV) of the system: 
construction and launching of the first four sa tellites and construction of the first ground-
based infrastructures, allowing to develop, validate and verify the Galileo system before its deployment; 
• The deployment phase , aiming at reaching two successive steps: 
– Initial Operational Capability (IOC) of the system: extension of the infrastructure  to 
eighteen satellites and upgrading the gr ound segment allowing provision of early 
services for OS, PRS and SAR; 
– Full Operational Capability (FOC): completion of the infrastructure and full provision 
of five services;  
• The exploitation phase , set to begin at the latest upon conclusion of the deployment 
phase: involves service provision, management  and operation of the infrastructure, the 
maintenance, constant improvement and renewal of the system.  
 
2.2.2.  EGNOS: Objectives, infrastructu re and implementation phases  
The EGNOS programme, which complements the signals of the US GPS to provide users 
with a more precise positioning over the European area
43, is to provide three services :  
• the Open Service (OS): for mass-market receivers and common user applications. It 
provides freely accessible signals for positioning, it was declared operational44 in October 
2009 and is already used in severa l activities such as agriculture; 
• the Safety-of-Life service (SoL) : for safety-critical transport applications, namely in civil 
aviation. It provides enhanced  and guaranteed performance and features an integrity 
warning system. It was declared operationa l in March 2011 and is  used by aviation and 
maritime transport sectors in Europe; 
• the EGNOS Data Access Service (EDAS) , for enhanced applications, it provides 
terrestrial commercial data service and is offered on a controlled access basis (e.g. through 
Internet or mobile phones), possibly on payment of a fee in the future.  
The Commission, with the suppo rt of ESA, drafted the EGNOS System Mission 
Requirements Document45, in order to detail  these services. The EGNOS MRD defines the 
high-level mission requirements applicable to  EGNOS system, services and operations. 
To be able to deliver these three services, the infrastructure  of EGNOS consists of: 
• Space infrastructure of three geostationary (GEO) satellites, 
• Ground infrastructure consisting of 34 ranging and in tegrity monitoring stations 
(RIMS) mainly in Europe, 4 control and proc essing centres to proce ss the RIMS data, to 
generate corrections for the na vigation data and to provide in formation on the integrity of 
the system, and 6 navigation land earth statio ns to upload the correction data to GEO 
satellites;   
 
The development and deployment of  EGNOS have been completed, the exploitation started  
in October 2009. 
                                                 
43 Idem footnote 27 
44  EGNOS Service Definition Do cument - Open Service:  
http://ec.europa.eu/enterprise/policies/satnav/egn os/files/brochures-leaflets/egnos-os-sdd_en.pdf 
45 The EGNOS MRD is an internal Commission document. 
 
EN 20   EN 3. PROBLEM DEFINITION  
3.1. Challenges 
Today, the implementation of the GNSS Programmes raises many challenges for the 
European Union. As highlighted in section 2.2 it is the first time  the EU owns and is fully in 
charge of programmes of such magnitude  and technical complexity  on a very long time-
span .  
• First time : the European Union does not have  experience in managing similar 
programmes with such particular security requi rements and such level of technical details; 
• Magnitude  and technical complexity : these programmes are not based on off-the-shelf 
technology but on the technology sp ecifically developed for a c oncrete purpose, requiring 
heavy upfront investment and continuous ma intenance and technological updates of the 
design; 
• Long-term commitment : building space systems requires a long-term commitment and 
adequate funding to support the implementa tion and exploitation. The time-scale of 
building such space programmes is 20 years, comparable to the development of the US GPS or any design in the aerospa ce sector while this may not be in line with the EU 
budgetary cycle; 
• Short-term window of opportunity : To maximise economic benefits expected from the 
Galileo system, the timing is crucial - Galile o needs to be the second global satellite 
navigation system of reference to ensure the penetration of the Galileo standards in the 
industry. This window of opportunity is na rrow as other competi ng Russian (GLONASS) 
and Chinese (COMPASS) GNSS are building up progressively their full operational 
capability. 
Should these challenges not be tackled approp riately, the EU would fail to successfully 
deliver the economic and social benefits e xpected from the European GNSS Programmes. 
3.2. Evaluations of the GNSS programmes 
The Court of Auditors  published a report
46 in 2009 on the management of the Galileo 
programme's development phase (until 2008 ). The Court concluded on a number of 
recommendations that were taken up by the Commission in the new governance design and 
which aimed at supporting the Commission in its  task of programme manager as of the 
adoption of the GNSS Regulation July 2008. 
In January 2011 the Commissi on published a Communication47 on the mid-term review of 
the European satellite radio navigation programmes (summary attached in Annex I). The 
mid-term review evaluates ex-post the pr ogrammes since 2008 when the Commission took 
over as programme manager and concludes that  significant progress has been made: EGNOS 
system is operational and the Galileo ground instal lations are ready for the launch of the first 
operational satellites in 2011. The report cl early identifies the main problems:  
                                                 
46 Court of Auditors special report 7/2009. This report contains a clear overview of the governance and financing 
flow of the Galileo and EGNOS programmes during 1999-2007. 
47  COM(2011) 5 final of 18.1.2011 on Mid-term review  of the European Satellite radio navigation programmes 
 
EN 21   EN • Cost overruns resulting in a need for addi tional resources to complete the Galileo 
infrastructure and delays in delivering this infrastructure 
• Undefined funding and governance for the expl oitation phase of both programmes which 
could compromise the objectives of the GNSS Regulation. 
These problems and their drivers are described in more detail in the following two chapters. 
Recommendations for improvement include in shor t-term a need to provide the first Galileo 
services in 2014-2015 and in a l ong-term the need to complete the Galileo infrastructure and 
secure related financing and governance. They are reflected in the design of policy options. 
3.2.1.  Galileo 
The Galileo programme is facing cost overruns for financing the system infrastructure and 
delays in delivering this infrastructure. In  2008 the GNSS Regulation set a schedule according 
to which the development pha se would be completed by  2009, the deployment of the 
infrastructure by 2013 and the exploita tion phase would start as of 2014-2015.  
The development phase suffered a delay of three years and is now expect ed to be completed 
in 2012. Consequently, the deployment phase is e xpected to reach initial operational capacity 
(IOC) and provide early servic es in 2014-2015 and full operationa l capacity (FOC) in 2019 as 
outlined below in Figure 1.  
Figure 1: Overall schedule of the impl ementation of the Galileo programme 
 
       
• The Development and Validation Phase  started in 2002 and should have originally run 
until 2005. Two experimental satellites (GIOVE-A, GIOV E-B) were launched which 
fulfilled the primary task of bringing into use the frequency filings according to the provisions of the Internationa l Telecommunications Union (I TU) Radio Regulations (RR). 
In-Orbit Validation is using four fully-fledged satellites that are expected to be launched 
between 2011 and 2012. 
• The Deployment Phase  which comprises the building up of the full Galileo system by 
launching the complete constellation of 30 satellites, including 3 in-space spares, and 
building up the ground structure is expected  to deliver first services as of 2014-2015 
(IOC) and to reach full operat ional capability (FOC) in 2019. 

 
EN 22   EN • The Exploitation Phase , operation of the system, will start in parallel with the 
deployment phase to provide early services  and fully after the completion of Full 
Operational Capability. 
The fact that the Galileo programme will not deliver as planned was caused by a number of 
difficulties (i.e. drivers) listed below. They generated delays and additional costs mainly related to technical risks and security constrains.  
In the development phase , several difficulties
48 were encountered: 
• The transfer of project supervision meant the need to renegotiate some contracts and the 
requirements associated with putti ng the new arrangements in place;49 
• An unforeseen second experimental satelli te was launched in order to retain the 
frequencies that were filed to the ITU; 
• Technical constraints were related to the finalisation of certain security-related aspects 
(e.g. necessity to deploy ground stations only on the European territories and not worldwide as was initially planned); 
• Unexpected delays were associated with se tting up contracts for the deployment phase; 
• A number of technical risks,  stemming from the technical complexity of the programme 
and the lack of previous expe rience in similar projects, need ed to be validated during the 
in-orbit validation phase. They were not accounted for in the initial planning and 
generated further delays and costs. 
All those difficulties generated cost overru ns amounting to EUR 560 million for the ESA 
development phase. At the request of Member St ates, the Commission agreed to bear this cost 
so as to ensure the continuity of the programme  despite the fact that this cost should have 
been financed directly from  the national budgets of the ESA members. This cost was 
unforeseen and had to be covered from the budge t of 3.4 billion EUR initially planned for the 
deployment phase. 
The deployment phase  recorded further delays and cost overruns:  
• An increase in prices for launc h services worldwide led to an  extra cost of some EUR 500 
million for the deployment phase; 
• A lack of competitive bids due to monopoly situ ation of some tenderers, led to increased 
prices;  
• The higher costs of satellites, launchers and ground segment, led to the increase of the 
system cost exceeding the 2007/2008 preliminary estimates. 
The Commission took steps to reduce the impact of these problems and proposed a number of 
measures to reduce their impact, including:  
- Providing more accurate estimations of expected procurement costs: unlike in 2007, 
the Commission today has access to real market  prices for most of the services it 
requires to complete and operate the Galil eo and EGNOS infrastructures. Contracts 
are in place that provide for price stability for some time to come. 
- Achieving greater clarity on th e technical requirements and the ability of industry to 
deliver: In particular as regards the Safety -of-Life service, discussions with Member 
States and user communities have greatly progressed, to the point  that implementation 
options are better known today.  
                                                
 
48 COM(2011) 5 final of 18.1.2011 on Mid-term review  of the European Satellite radio navigation programmes 
49 For details on transfer of project supervision, see Court of Auditors Special report 7/2009  
 
EN 23   EN - More realistically assessing the various risk  factors that can aff ect the programmes as 
previous cost estimations for the GNSS pr ogrammes were not based on an appropriate 
risk assessment.  
The ultimate objectives of the Galileo programme have not been called in question. However, 
due to the described delays and cost ove rruns, the 2007-2013 budget for the European GNSS 
programmes allowed for building only 14 satellite s (out of the 30 envisa ged) to be launched 
as of 2012. They will add to the four IOV satellites to form the constellation of 18 satellites. A 
first version of the ground infrastructure will al so be deployed. Based on this infrastructure, 
early services will be provided from 2014-2015 but only in cooperation with the US GPS. 
More recently, the Vice-President of the Commission Antonio Tajani announced50 further 
potential savings through rationalising costs a nd putting pressure on industry for an improved 
deal.  
It needs to be emphasised that the problem driv ers cannot be completely tackled as existence 
of uncertainties and risk in programme manage ment is an inherent feature of complex 
programme. Therefore, despite various mitigation measures can be taken, it would be inappropriate to suggest that these wi ll eliminate the drivers completely.  
3.2.2.  EGNOS 
The EGNOS programme will deliver as planned. The Open Service officially became 
operational on 1 October 2009. The system has operated since then in accordance with the required specifications. The Safety of  Life service was declared open on 2
nd March 2011. The 
third service for dissemination of commercial data EDAS should be provided as of 2012.  
3.3. The problem that requires action 
Given the delays and cost overruns described in  the previous section, the system developed 
under the Galileo programme  will not be fully operational by 2013 as planned and it will not 
be completed within the budget allocated in th e current multi-annual financial framework as 
stated in the GNSS Regulation.    
As regards the EGNOS programme , by the end of 2013, the system will provide all services 
as stated in the GNSS Regulation. However, th e operations, maintenance and evolution of the 
system need to be secured.  
Therefore, the present report will investigate the way forward for both programmes given 
the two identified problems:   
1. The Galileo system will not be fully op erational and will not independently 
provide all five services  in 2013 as planned.   
Since its development phase, the Galileo programme encountered cost overruns and 
delays in delivering a system as summar ised in the evaluations of the Galileo 
programme. The effects of these problems were partly prevented by a number of 
mitigation measures as described in chapter 3.2. However, the schedule set by the GNSS Regulation according to which the Ga lileo system is fully operational and 
provides independently all five services (see chapter 2.2.1) by 2013 cannot be met.   
                                                
 
50 Press conference on 22.6.2011, Paris Air Show, France. 
 
EN 24   EN Therefore, the first problem will address what are the options for deploying the 
Galileo system after 2013 in terms of servi ces and infrastructure, while any option 
considered will need to ensure the on-target cost and on-target date delivery of the Galileo services, anticipating to the best any further drift.  
2. The financing and governance framework for the exploitation phase of both 
Galileo and EGNOS programmes after 2013 is not yet established.   
Following the adoption of the Commissi on's proposal for the next multiannual 
financing framework (2014-2020)
51, it is proposed that the Galileo and EGNOS 
programmes are fully financed from the EU budget.  
As the GNSS Regulation does not lay down the financing and governance framework 
of the exploitation phase  for Galileo and EGNOS programmes after 2013, a new legal 
basis is needed for the systems to be operational, maintained and managed in a long-run. This implies not only a need for fina ncing but also placing new requirements on 
the operational management of the infrastructure. 
As the design and analysis of this new legal and financing framework depends on the 
options for deployment of the Galileo system, the analysis in this report will be carried out in sequence of the problems.   
While the deployment phase of the Gal ileo programme will be completed in 
2018/2019, the exploitation phase will start gradually in 2014. As a result the 
deployment and exploitation phases will run in  parallel for around five years. During 
this period, the governance of the deployment phase sh ould provide continuity, 
consistency and credibility towards third pa rties. Regarding the Galileo exploitation 
phase, new governance arrangements should be  considered and gra dually adapt to the 
needs and experiences arising from th e provision of the first services. 
As the exploitation phase of the E GNOS programme is ongoing, the long-term 
governance framework needs to be se t-up more urgently as from 2014. 
Addressing problem 2 aims at defining roles and responsibilities  in a long-term, 
sustainable and stable governance framework applicable  to the exploitation of both 
EGNOS and Galileo. 
It is to be noted that the scope of probl em 2 needs to be delimited. The aim of the 
analysis is neither to deci de upon the operational details and timing of the transition 
between the current and future governance framework nor to decide upon possible intermediary governance for the programme s or to define short-term governance 
solutions.    
3.4. Who is affected, in what ways and to what extent? 
The two problems outlined above hamper the provision of services foreseen by the GNSS 
Regulation: without funding and an appropriate  governance framework, the infrastructure 
available in 2014 will not prope rly deliver any service.  
                                                
 
51 COM(2011) 500 of 29.6.2011 "A Budget for Europe 2020"  
 
EN 25   EN As outlined in chapter 2.1, this would affect th e EU citizens, industry an d public authorities at 
various levels: 
• The growth of the European  navigation applications in dustry depends on the very 
existence of a European GNSS. In the abse nce of a European GNSS, this whole new 
sector will fail to emerge; 
• Furthermore, several economic sector s rely on the existence of a GNSS: 
- The positioning information it provides, drives transport activities in all its forms and 
hence logistics systems, that provide goods to EU consumers; 
- The timing information is used to sync hronise telecommunications networks and 
increasingly power management systems, especially in the frame of the development of smart grids. 
Of course, these industries do not rely t oday on a European GNSS and have so far 
satisfactorily relied on the US GPS. The very  fact that US GPS provides a cost-effective 
solution to positioning and timing needs has acce lerated the adoption of GPS based devices in 
all aspects of EU citizens' daily life. Therefor e, the US GPS is seamlessly becoming a single 
point of failure of EU critical  infrastructures, which means that a disruption of GPS signal 
provision resulting from a techni cal failure would have a ma jor impact on the European 
society. 
This reliance is not limited to private sector in frastructures and utilities , but is also affecting 
public authorities and semi-public systems such  as: law enforcement, emergency services, 
land survey applications, monitoring of civil infrastructures, etc. 
Finally, the EU, as the owner of tangible and intangible assets alrea dy delivered, is also 
affected as it has the responsibility to  preserve investments already made.  
3.5. Foreseen evolution of the problem 
Should all things stay equal, given the objectiv es of the GNSS Regulation and the progress on 
the Galileo programme deployment, the Initial Op eration Capacity of the Galileo system will 
be reached in 2014-2015. The EGNOS system will continue its operations. 
The consequences of not having a political decision concerning the financing and governance 
will impact the further implementation of the Galileo and EGNOS programmes. Without 
funding and guaranteed exploitation, the opera tors of Galileo and EGNOS will have to 
discontinue their activities af ter mid-2014. This means that the 18 launched satellites of 
Galileo will gradually move away from their orb its and will be lost some weeks after. The 
ground infrastructure consisting mainly of elect ronic equipment that will not be operated or 
maintained will be unusable afte r a few months. System suppliers will stop maintaining their 
technical capabilities in the field of satellite navigati on. To sum up, all assets owned by the 
EU in these programmes which will have cost by then EUR 6.4 billion in total to the EU and 
ESA will be lost. 
The impact will be devastating from the political, economic and scientific point of view. The 
EU will lose its credibility as a strategic partner in providing global satellite navigation systems vis-à-vis its own citizens, industrie s and international partners. The economic 
potential that could have been created by the sy stems, which is estimated to be around 134  
billion EUR over the 2014-2034 period
52 including downstream, upstream market and public 
                                                 
52 This amount is detailed in chapter 6.1 Analysis of impacts for problem 1:  
 
EN 26   EN benefits, will be lost together with the potential for innovation and building up a high-tech 
knowledge base in Europe.53  
From the global perspective, the ambition of the Galileo system will be lost. It will not be the 
second global satellite navigation system of choice for chip manu facturers. For most receivers 
two reference constellations are sufficient to en sure adequate service quality. Consequently,, 
Galileo could definitively loose gr ound if it arrives only as the third or fourth system. In 
addition, it will not use the window of opportunity  of providing the commercial service to 
global customers and it will loose out on the pot ential stimulating effect on the European 
economy. These opportunities will be  taken over by other countries  (Russia, China) building 
their own systems and advancing dynamically as previously menti oned in section 2.1.  
3.6. EU right to act 
The EU right to act is based on article 170 of the Treaty on the functioning of the European 
Union54 and the GNSS Regulation on the further im plementation of the European satellite 
navigation programmes (EGNOS and Galileo)55. 
The establishment of satellit e navigation systems cannot be sufficiently achieved by the 
Member States as it exceeds the financial an d technical capacities of any single Member 
State. Therefore, it can be only achieved by action at EU level. 
The GNSS Regulation defines that the European Union shall be the owner of all tangible and 
intangible assets created or developed under the programmes. As  owner of all related tangible 
and intangible assets, the European Union has to ensure that all conditions to operate and exploit the systems are in place as of the date of introduction of the first positioning, navigation and timing services in 2014-2015. Th erefore, the governan ce is de facto of 
European nature.  
4. O
BJECTIVES  
4.1. General policy objectives 
The general objective of this proposal as enshrined in the Article 170 of the TFEU56 "to 
contribute to the establishment and development of trans-European networks " and is 
further stated in the flagship initiative of the Europe 2020 strategy57: "to develop an 
effective space policy to provid e the tools to address some of the key global challenges and in 
particular to deliver Galileo [...]".  The political objectives as described in chapter 2.1 remain 
unchanged: 
• Set up a first global satellite navigation system (GNSS) under civilian control  completely 
independent of other existing systems , which would guarantee uninterrupted GNSS 
services and a strategic advantage for Europe 
• Reinforce the resilience of the European  economic infrastructure by providing a backup 
system in case of signal failure  from other systems 
                                                 
53 More details on the impact on the downstream applicatio ns market are described in ibid source footnote 13  
54 OJ EU C 83/47 of 30.3.2010 
55 OJ EU L 196/1 of 24.7.2008 
56 OJ EU C 83/124 Official Journal of the European Union 30.3.2010  
57 Communication from the Commission COM(2010)2020 of  3 Mars 2010 on 'Europe 2020 - A strategy for smart, sustainable and inclusive growth', p15 
 
EN 27   EN • Maximise socio-economic benefits  for Europe relying on more accurate, available and 
robust signal by exploiting the new opportuni ties generated by high-precision satellite 
navigation to a much fuller exte nt than currently possible  
• Build Europe's technical capability to develop, deploy and operate complex large-scale  
infrastructures  
These political objectives were the basis for de fining the European sate llite navigation policy 
in the GNSS Regulation, which aims at provi ding the EU with two satellite navigation 
systems established under the EGNOS and Galileo programmes: 
• The aim of the Galileo programme is to es tablish the first global satellite navigation, 
positioning and timing infrastructure specifi cally designed for civilian purposes. The 
system established under the Galileo progra mme is completely independent of other 
existing or potential systems and the signals emitted by the system can be used to provide five services as described in chapter 2.2.1. 
• The aim of the EGNOS programme is to impr ove the quality of signals from existing 
global navigation satellite systems which can be used to provide three services as 
described in chapter 2.2.2. 
4.2. Specific policy objectives 
(1.a) To define a way forward on the furt her implementation and exploitation of the 
European GNSS programmes during the ne xt multiannual financial framework 2014-
2020 (objectives of the Galileo and the EGNOS  programmes are defined in chapters 
2.2.1 and 2.2.2 and are used as th e baseline for comparison). 
(1.b) To ensure that the policy options for im plementation and exploitation of the European 
GNSS programmes are on-target cost s and on-target date delivery.  
(2) To define a long-term, stable, sustainabl e governance scheme for the exploitation of 
both Galileo and EGNOS systems that should address and fulfil at best the following 
objectives: 
1. Feasibility The legal complexity of th e initial set-up should be minimised and 
allow the exploitation model to be up and running at the beginning of the exploitation phase 
2. Fast decision making There should be fast and efficient operational decision making, 
recruiting of staff and controlling of costs, by means of avoiding unnecessary layers of governance and ensuring unit of command  
3. Robustness The framework should be resilient  to liability and other legal risks. The 
entity/entities should deliver a high quality, reliable, sustainable service, taking into account the operators and users needs and maximise usage of 
the satellite signals  
4. Evolutivity The structure should be able  to evolve over time, concerning functional 
structure, regulations, contract, etc.  
5. Positive impact on  EU 
economy Innovation should be promoted, stimulating the EU economy to impact 
indirect revenues, and possible competition concerns should be 
controllable  
6. Consistency with EU 
policies and promotion of EU interests The exploitation structure should ensure strategic independence, be in 
line with EU objectives in term of risk allocation, while contributing to existing EU policies  
 
EN 28   EN 7. EU control and 
accountability The entity/entities responsible for exploitation of the European GNSS 
programme must operate at arm's length from the Commission for: 
− governance transparency  
− control and command of costs in order to avoid future cost 
overruns  
− control of pricing policy (fair ness and affordability of those 
services equated with a mission of general interest)  
− management of procurement processes 
These governance objectives were defined based on the principles of the Financial Regulation 
applicable to the budget of the European Communities58, particularly taking into account the 
principle of sound financial management. They we re discussed with stakeholders within the 
working group on future governance (see Annex II for details) in order to set objective and transparent criteria to assess va rious options for governance.  
4.3. Consistency with other policies and objectives 
The Space Policy Communication of the Europ ean Union identified Galileo, EGNOS and 
GMES
59 programmes as its flagships.60 The Galileo and EGNOS programmes form an 
integral part of the Europe 2020 initiative61 and  the Innovation Union initiative62 as they are 
intended to push the EU to the forefront by deve loping innovative ways of exploiting satellite 
navigation, boosting economic activity in the market further downstream, creating new 
business opportunities, facilitating the provis ion of humanitarian aid and enhancing the 
wellbeing of Europe's citizens (e.g. by making tran sport safer, increasing civil protection and 
developing social services for the elderly and th e disabled). The benefits of these programmes 
for the EU cut across all sectors of the econom y, such as transport, telecommunications, the 
environment and security. 
Particularly, the GNSS programmes contribute to the European Transport Policy  as 
described in the White Paper63, fitting in with the sustainabl e development strategy adopted 
by the European Council. In this  context, the GNSS programmes are highlighted as a project 
acting as a catalyst for the development of intelligent transport. Interoperable intelligent transport services and systems, on the basis of  accurate and reliable positioning that will be 
offered by the GNSS programmes, are a key tool in the achievement of objectives of safety 
and fluidity of road traffic. The GNSS progr ammes are thus instruments essential to the 
transport development policy. 
Concerning the European Transport Policy, sp ecifically the GNSS programmes are major 
priority projects of the trans-European transport networks  implementation which the 
European Union is supporting
64. They contribute to this development with for instance their 
potential for traffic management and informatio n for users of the trans-European network and 
                                                 
58 COUNCIL REGULATION (EC) No 1525/2007 of 17 December 2007 amending Regulation (EC, Euratom) No 1605/2002 on the Financial Regula tion applicable to the general budget 
of the European Communities, as modified.  
59 Global Monitoring for Environment and Security (GMES) programme aims at achieving an autonomous and 
operational Earth observation capac ity for environment and security. 
http://ec.europa.eu/gmes/index_en.htm  
60 Communication from the Commission COM(2011)152 of 4 Apr il 2011 towards a space strategy for the 
European Union that benefits its citizens 
61 Communication from the Commission COM(2010)2020 of  3 March 2010 on 'Europe 2020 - A strategy for smart, sustainable and inclusive growth' 
62 Communication from the Commission COM(2010) 546 final of  6 Oct 2010 on 'Europe 2020 Flagship Initiative Innovation Union' 
63 White Paper  COM(2011) 144 final of 28 Mar 2011 on ‘Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system’   
64 Communication from the Commission COM(1999) 54 on 'Galileo  - Involving Europe in a new generation of satellite 
navigation services'; Decision of the European Parliament and of the Council No 661/2010/EU on Community guidelines 
for the development of the trans- European transport network; White Paper  COM(2011) 144 final of 28 Mar 2011 on ‘Roadmap to a Single 
European Transport Area – Towards a competitive and resource efficient transport system’   
 
EN 29   EN as an independent radio navigation programme  used for highly accurate and reliable 
positioning. 
In addition, also as part of the European Tr ansport Policy, an objec tive of the European 
Commission is to create a European Electronic Tolling Service  (EETS). It should start 
offering services by 2012. Satell ite navigation can become the pr eferred technology to realise 
a unique Europe-wide tolling service. The EU’s Interope rability Directive of 200465 
recommends the combined use of satellite and mobile communication technologies as part of 
new electronic toll collection systems. 
Finally, the global navigation satellite systems are enablers for a number of critical 
infrastructure sectors such as transport and aviation66. The EU Internal Security Strategy67 
refers to the Galileo programme in relation to the progress made on security research techniques and technology. The GNSS programmes are also expect ed to contribute to law 
enforcement in various sectors. For instance, con cerning the monitoring of the fisheries in EU 
Waters, the Commission Regulation (EC) No 2244/2003 of 18 December 2003 laid down 
detailed provisions regarding satellite-based Vessel Monitoring Systems . These systems aim 
at monitoring vessels position in order to  prevent illegal catches and black landings. 
5. P
OLICY OPTIONS  
The implementation of the programmes as defined in the GNSS Regulation which defines the 
European satellite navigation policy and lays do wn the objectives of the Galileo and EGNOS 
programmes is considered to be the baseline scenario. The "no EU action" scenario as 
described in chapter 3.5 will be analysed as an alternative policy option. 
5.1. Policy options for problem 1: Way forw ard on further implementation and 
exploitation of the European GNSS programmes 
5.1.1.  Galileo 
The Galileo system has been designed to meet the objectives set in GNSS Regulation and 
defined in the MRD, as described in the context,  section 2.2.1. It is very difficult to re-design 
a system already in its implementation phase.  
To propose alternative policy options, a deviation from these objectives is necessary regarding 
the number of satellites for space segment and implementation of safety-of-life service 
features for the ground segment.   
The following options to define a way forward on the further Galileo infrastructure 
implementation could be envisaged: 
A. Space segment : At Initial Operationa l Capability (IOC) foreseen in 2014-2015, the 18 
already procured satellites should be de ployed, against the 30 planned for the Full 
Operation Capability (FOC). Taking into acc ount that satellites are deployed on three 
                                                 
65 Directive 2004/52/EC of the European Parliament and of the Council of 29 April 2004 on the interoperability 
of electronic road toll systems in the Community 
66  Council Directive 2008/114/EC of 8 December 2008 on  the identification and designation of European critical 
infrastructures and the assessment of the need to improve their protection. 
67 COM(2010) 673  of 22 November 2010, Communication from the Commission to the European Parliament 
and Council: The EU Internal Security Strategy in Action: Five steps towards a more secure Europe. 
 
EN 30   EN orbital planes and that they have to be launched at leas t by pair per orbital plane, 
determined by the capacity of the Soyuz and Ariane launchers, th ree theoretically and 
technically possible final cons tellations can be examined68:  
(A.1)  Deploying 18 satellites as a final constellation ; 
(A.2)  Deploying  24 satellites as a final constellation, i.e. launching 6 extra satellites 
before declaring FOC completion;69 
(A.3)  Deploying  30 satellites as a final constellation (cf. the initial FOC target), i.e. 
launching 12 extra satellites before declaring FOC completion;  
B. Ground segment : At IOC (2014-2015), only an inte rmediate ground infrastructure70 (v2) 
will be deployed, allowing Galileo to provide navigation signals for OS, PRS and SAR. A 
subsequent ground infrastructure (v3) is cu rrently planned to be deployed between IOC 
and FOC to enable the provision of the st and-alone Safety-of-Life service and to 
implement the full PRS capabilities. Three technically possible ground infrastructure 
configurations can be examined: 
(B.1)  Ground infrastructure, as to be reached at IOC (v2) with no provision of the 
SoL-service ; 
(B.2) Ground infrastructure v3 with SoL service only available in interoperability  
with the US GPS (this would require less ground facilities and make the infrastructure simpler, additional information on the SoL re-profiling has been added in annexe VIII); 
(B.3) Ground infrastructure v3 with SoL service available on a stand-alone basis ; 
Other re-designs are not considered, as they w ould generate significant delays and costs while 
the implementation has already started. 
Not all combinations of these tw o levers are feasible from a technical point of view: option 
(B.3) can only be considered with a full nominal  constellation, as smaller constellations would 
anyway not be able to provide a signal accura te enough to provide a stand-alone SoL service. 
The policy options to be considered for the furt her deployment of the in frastructure lead to 
identify final FOC infrastructure. The policy options are outlined in Table 1. 
The planning of reaching IOC in 2014-2015 a nd FOC in 2018-2019 will not be affected 
(accelerated or decelerated) by any of the options  as it is expected that the integration and 
validation of the system activities will require th e same amount of time regardless of the space 
and ground segment technical characteristics. 
Table 1: Policy options for problem 1  
Option Space 
segment Ground 
segment  Services 
(1) Baseline option (A.3)  (B.3)  Services can be provided stand-alone  as defined in the Galileo 
Mission Requirements Document 
(2) Revised services 
option (A.3)  (B.2) Services can be provided stand-alone as defined in Galileo 
Mission Requirements Document, except for SoL service that 
can be provided only in  cooperation with GPS  
                                                 
68 These options refer to the number of satellites deployed at the moment when the full operational capability of 
the system is declared. The presentation of the options  is simplified for the purpose of this report, the 
system configuration (constellation geometry) relate d to the number of operational and spare satellites 
for each of the option is not presented. 
69  The 24 satellite constellation geometry can be optimised depending on the future evolution (24 satellites 
placed in the 27 initial slots or homogeneously distributed) 
70  The ground infrastructure comprises of over 50 ground stations around the world 
 
EN 31   EN (3) Reduced services 
option (A.2) 
 (B.2) Services can be provided stand-alone but not as defined in 
Galileo Mission Requirements  Document (reduced service 
level). SoL can be provided only  in cooperation with GPS.  
(4) Degraded services option (A.1) 
 (B.1) Services cannot  be provided stand-alone , only in 
interoperability with GPS, not as defined  in Galileo Mission 
Requirements Document. 
(5) Termination of programme none none none 
 
5.1.2.  EGNOS 
The EGNOS system is already in operational ph ase, it requires the co ntinuation of operations, 
maintenance and evolution of EGNOS services during the next years. Therefore two policy 
options are possible: 
(1) Continuation of the Programme:  continuation of operations, maintenance and 
evolution of the EGNOS services 
(2) Termination of the Programme:  discontinuation of all activities 
As EGNOS SoL is already operational71, the second option is not further considered: Having 
declared the Safety of Life service operati onal, the Commission has engaged the end-user 
communities in adopting the use of  EGNOS. This adoption is lead ing end-users, in particular 
in the aviation sector, to heavily invest in adapting their systems to EGNOS: For instance, 
Eurocontrol is enabling the us e of EGNOS by defining its con cept of operations, supporting 
procedures design, conducting a generic safe ty assessment, supporting EASA in the 
development of airworthin ess and operational approval  material, developing an 
communication tool and mana ging pre-operational projects.72  
This calls for a long-term commitment of th e Commission to provide EGNOS services. 
Therefore, in the analysis of impacts all options for the infrastructure completion of Galileo foresee the exploitation of  EGNOS, see section 6.1. 
5.2. Policy options for problem 2: Governance scheme for the exploitation of both 
Galileo and EGNOS systems  
All policy options for the infrastructure comp letion require a governance structure for the 
exploitation of the GNSS programmes (G alileo and/or solely EGNOS).  
The objective, as defined in section 4.2 is to define a long-term , stable, sustainable 
governance scheme for the exploitation of both Galileo and EGNOS systems. This governance scheme should be defined by the needs and objectives of the programmes.  
Implementing such a new governance framework will require a consequent lead time in order 
not only to settle legal and administrative issues , but also to build up required capabilities and 
expertise not existing so far. In order not to  cause disruption in the operations, a smooth 
transition between current deployment governance and exploitation will need to be carefully 
planned and take place between IOC and FOC.   
                                                
 
71 EGNOS Safety of Life - Service Definition Documen t: The EGNOS SoL Service is available from the 2nd 
March 2011 
(http://ec.europa.eu/enterprise/policies/satn av/egnos/files/egnos-sol-sdd-v1.0_en.pdf) 
72 http://www.eurocontrol.int/press-re leases/egnos-operational-aviation 
 
EN 32   EN In order to define this governance scheme  a three-step approach has been adopted: 
1. What needs to be done? Defining a list of functions to be performed during 
exploitation phase at the le vels of political supervisi on and programme management 
(chapter 5.2.1) 
2. How should these functions be organised? Determining how many entities are 
required to perform all functions identif ied in the first step (chapter 5.2.2) 
3. What should be the legal form of the entity in ch arge of European GNSS 
programme management?  Identifying the most appropriate legal form of the 
programme management entity that would be adopted for the future  exploitation of the 
programmes (chapters 5.2.3 and 5.2.4) 
5.2.1.   Identification of functions to be  performed during exploitation phase 
This governance framework has to be defined at two levels: 
• The political supervision level , in charge of  
– setting the general objectives  and the associated mission requirements  
– deciding on and monitoring the budget  to be allocated and the funding mechanisms  
– ensuring international cooperation  required by the Programmes 
– setting the proper delegation of execution activities  at the programme management 
level 
– setting and monitoring the security rules  and requirements to be implemented  
• The programme management level , ensuring that systems fulfil the mission assigned by 
the political level on time and with  target cost. This responsib ility covers the coordination 
and the monitoring of all activities contributing to th e mission execution:  
– research and evolution activities   
– system design activities  (Design Authority role) 
– system deployment activities  to procure all elements and integrate them into a system 
– system operations  to manage the constellat ion and the ground facilities 
– security activities  to ensure the system is not vulne rable to intrusions and attacks  
– service enabling  activities  to allow service provision, defi ne service standards, ensure 
the certification of the services  and monitor system performance 
– service provision, commercialisa tion and interface with users  
In order to fulfil the principles and the specific objectives as outlined in section 4.2, the entity 
in charge of implementing operationally the programme needs to be endowed with a sufficient degree of flexibility and agility as  well as with the necessary features to be able to efficiently 
manage an industrial programme of such magn itude as the European  GNSS and to rapidly 
take decisions. For instance, this entity shoul d be able to attract the right resources and 
competences and establish specialised teams on new subjects such as system engineering or security management to effectively reach programmes' objectives. 
 
EN 33   EN Figure 2: Functions of political sup ervision and programme management 
 
The governance of downstream a pplication markets is not cons idered in this governance 
analysis as it has been treat ed separately in Impact Assessment SEC(2010) 717 of 14th June 
2010 on the Action Plan on Global Navigation Satellite System (GNSS) Applications73. 
Because the perimeter of activities to be orga nised and governed are distinct, exploitation and 
downstream governances are independent issues. 
5.2.2.  Organisation of the programme management functions  
The Exploitation study74 analysed in detail three potential scenarios with management 
functions split between one, two or three entities.  A comparison of their respective advantages 
and drawbacks on criteria such as: maximisation of usage, maximisation of direct revenues, 
operational excellence and effici ency, governance efficiency, c onflict avoidance and time for 
implementation, showed that the integrated mo del with one single entity responsible for 
programme management is considered to be mo re efficient than splitting the responsibilities 
between infrastructure development and system operations (two entity scenario) or adding a third entity to be in charge of the comme rcial service (three en tity scenario).   
The integrated model has been chosen in order to: 
• Ensure a consistency between the design of th e infrastructure and th e operational activities 
and maximise the coherence and efficien cy of the future exploitation entity 
• Maximise the control on the operation and the exploitation for the EU (e.g. strategic 
independence, ownership rights…) 
• Maximise the synergies between functions (cost and competences) 
• Avoid an excessive split of responsibilities wh ich would not allow to make overall trade-
off decisions between available budget, user needs and operational constraints 
• Give the EU an opportunity to set up an entity keeping the whole control on the 
exploitation of the system 
                                                
 
73 This Impact Assessment demonstrated the need for a more extensive action plan to foster the development of 
EGNOS and Galileo downstream app lications and to enhance the quickest, deepest, broadest 
development of applications across all domains. Th is was necessary because Europe visibly faces a 
limited and slow development and adoption of GNSS downstream applications based on the 
Programmes. The main conclusion was to improve the framework conditions for the market to work 
through a targeted Action Plan which provided the most adequate remedy to the full range of causes to 
the problem 
74 Exploitation Study (2009), Roland Berger Strategy Consultants, commissioned by the European Commission. 
 
EN 34   EN • Pursue the objectives and pr inciples concerning the governan ce framework, set in section 
4.2 
Numerous stakeholders in the exploitation of space infrastructure (e.g. GPS, GLONASS, 
Skynet 5, Paradigm and Intelsat) support the rationa le for an integrated model, in particular 
for systems whose design require s strong operational coordination.  
The results of this analysis were shared and di scussed in detail with stakeholders within the 
working group on the impact assessment (see Annex II for details). 
It should be highlighted that assigning responsibi lity over all activities to  one single E1 entity 
does not determine which activities should be pe rformed internally and which ones should be 
procured. These decisions shoul d be taken by the management  of the future programme 
management entity. 
The responsibility over the management of system security could depart from this integrated 
functional set-up defined here above in order to better involve Member Stat es in this specific 
decision making process. 
5.2.3.  Political supervision  
With the GNSS Regulation, the Commission, on behalf  of the European Union is the political 
body in charge of setting the European GN SS policy. Most existi ng space systems are 
currently overseen at national or intergovernmental level: e.g.  Eumetsat and Defence systems 
such as Helios (FR), SAR-Lupe (DE), Paradi gm (UK). Commercial space systems are being 
overseen by private corporate bodies (Inmarsat, Eutelsat) afte r having been initiated as 
intergovernmental ones. This tr ansition from public to privat e body took on average 15 years. 
The Commission's proposal for the next multi- annual financial perspective for the EU budget 
2014-202075 states that the European GNSS programme s shall be fully financed from the EU 
budget. Consequently, the Commission on behalf of the European Union remains the sole 
body responsible for overseeing their execution.   
5.2.4.  Options for programme management  
The European Commission will  be responsible for the po litical supervision of the 
programmes as described in chapter 5.2.3. There are four options to be considered for programme management: 
(1) European Commission 
(2) EU joint-undertaking 
(3) EU regulatory agency 
(4) EU public company 
Through the pre-screening criteria based on the obj ectives defined in section 4.3, in particular 
with regard to their feasibility, the following legal options  are discarded: 
(1) The European Commission  is currently managing both th e political supervision and 
the implementation, but this duality will not be  sustainable in an exploitation context: 
- In its Special report 2009/ 7, the European Court of Auditors has highlighted 
this point: " The European Commission has proposed itself as programme 
manager, a challenging role for which it has little experience. While this may 
                                                
 
75 COM(2011) 500 of 29.6.2011 "A Budget for Europe 2020"  
 
EN 35   EN be an expedient solution for the shor t term, the Commission should consider 
whether this would be the most appropriate long te rm arrangement ";76 
- The Commission cannot at the same ti me be the 'defender of the public 
interest' authority overseeing the GN SS markets and engage in programme 
management activities; 
- The Commission's organisation and pro cedures are not fit for managing 
complex programmes such as GNSS;   
- In most national contexts, these tasks are delegated to agencies as there are 
very few cases where a body in charge of political supervision and policy setting is directly in char ge of providing a service; 
- In this respect, the creation of an ex ecutive agency to which the Commission 
could entrust programme manageme nt tasks for the European GNSS 
programmes is not an option as the Co mmission creates it, maintains "real 
control" over its activity and appoints the key staff. Apart from passing pure 
implementation tasks to the executive agency the Commission would continue to stay as involved as it is today. 
(2) EU Joint Undertaking  is restricted to the purpose of research and development as 
stated in article 187 of the Treaty on the Functioning of the European Union (TFEU) 
which prevents any application for structures in charge of building an infrastructure or 
operating a service. This option is not feas ible and relevant in the context of the 
exploitation of deployed systems. 
Two options will therefore be retained for further analysis: 
(3) EU regulatory agency 
(4) EU public company 
5.3. Summary  
An overview of the different po licy options to be further stud ied is presented hereunder: 
Figure 3: Overview of policy options 
                                                 
76 European Court of Auditors, The management of the Galileo Programm e’s development and validation phase, 
Special Report 2009/7, article 82, p 40 
 
 
EN 36   EN  5 options for problem 1 
• (1) Baseline option 
• (2) Baseline revised services 
option 
• (3) Reduced services option 
• (4) Degraded services option 
• (5) Termination of Galileo 
Programme option  
 
NB: all options  include provision 
of services by the EGNOS 
system EGNOS policy options (1) Provision of services 
(2) Termination of programme Galileo policy options 
(4) Degraded services  (3) Reduced services  (2) Revised services  (1) Baseline  
(5) Termination of programme Problem 1: Way 
forward for the 
European GNSS 
programmes 
Problem 2: 
Governance scheme 
for the exploitation 
phase 2 options for problem 2 
– EU regulatory agency 
– EU public company (1.3) EU regulatory agency (1.1) European Commission 
(1.2) EU Joint Undertaking 
(1.4) EU public company Programme management 
options  
 
EN 37   EN 6. ANALYSIS OF IMPACTS  
6.1. Analysis of impacts for problem 1: Way forward on further implementation and 
exploitation of the European GNSS programmes 
The impact of the five FOC infrastructure co mpletion options can be assessed from the point 
of view of: 
• Benefits (indirect benefits and direct revenues) representing economic, social and 
environmental impacts 
• Costs (infrastructure completion and exploita tion costs) representi ng economic impacts 
• Competitiveness of the EU industry 
 
The indirect benefits, direct reve nues and costs are calculated over a period of 20 years from 
2014 to 2034 in order to take into account a complete lifecycle of the Galileo system, 
including the replenishment of the constellat ion and the potential development of a second 
generation. 
6.1.1.  Analysis of benefits  
6.1.1.1.  Availability of services per option 
In order to assess the benefits of each option, it is necessary to look at the Galileo service 
provision per option, the provis ion of EGNOS services being considered in all options. 
Simulations have been performed by the Europe an Space Agency to determine the navigation 
performance, expressed in terms of navigation accuracy,  which is provided with certain 
availability .  
• The final navigation  accuracy  depends on the one hand on the accuracy of measuring the 
distance between the receiver and the satell ites and on the other hand on the number of 
satellites. Therefore the navigation accuracy  differs for each infrastructure option; 
• The availability  can be explained by the percentage of time the accuracy is nominally 
met. The 99.5 % availability figur e means that for the remain ing 0.5% (corresponding to a 
maximum of 1.8 days per year), the performa nces are not met nominally which entails a 
degraded performance of  the navigation services;  
The objectives concerning the performance of Galileo have been set by the Galileo MRD on 
an accuracy of 4 m horizontally and 8 m vert ically (dual frequency service), with an 
availability of 99.5%. These objectives were ba sed on thorough consultati ons of end-users in 
numerous sectors, the availabil ity of 99.5% is linked to the av iations standards for safety-of-
life service. By comparison, th e GPS has a current accuracy of respectively, 29 m and 53 m 
(for a single frequency service) , with an availability of 99.5%77. The following table shows 
the simulated navigation accuracy  per infrastructure option: 
  
                                                
 
77 Based on ESA statistical analysis  of performance specifications.  
 
EN 38   EN Table 2: Simulated navigation accu racy per Galileo infrastructure option78 
Horizontal accuracy Vertical accuracy 
(m)/availability 99.5% Mean 
accuracy 
(99.5%) Worst user-
location 
accuracy Mean 
accuracy 
(99.5%) Worst user-
location 
accuracy  
(1) Baseline option 3.3 3.7 7 7.4 
(2) Revised services option 3.3 3.7 7 7.4 
(3) Reduced services option 8 25 11.5 30 
(4) Degraded services option 80 250 138 451 
(5) Termination of Galileo programme N/A N/A N/A N/A 
Option (1) and (2) satisfy the objectives set even for the worst user-locations while option (3) 
approaches these requirements. The accuracy of  option (4) is insufficient for the great 
majority of users. These values show a strong  and fast degradation of performance if the 
number of satellites is decreased. 
In addition, reducing the num ber of satellites affects service continuity : navigation 
performance at the surface of the Earth is less and less homogeneous and this degradation is not gradual. Service outages at a given point can then last up to  several tens of minutes. The 
simulations carried out by the European Space Agency are provided in the form of maps, 
which illustrate the navigation perfor mance over the world, see Annex VII.  
Furthermore, the  robustness of the system , i.e. the sustainability  of system performance 
under perturbations such as satel lite failure needs to be taken in to account. Option (4) will be 
less robust as the unforeseen breakdown of one or more satellites woul d strongly deteriorate 
navigation performance and even mean the inability to provide  any service, while options 
with larger constellations will be less impacted by such events . The probability of having the 
required number of operational sa tellites decreases continuously as the constellation ages, and 
therefore a strategy to maintain the constellati on has to be implemented to sustain the system 
and the performance the EU will have to commit to. 
The availability of services to be provided by the Galileo system alone and in combination 
with the US GPS in various policy options is i llustrated in Table 3. This table is based on the 
information available in September 2011 from th e European Space Agency and is deliberately 
simplified. 
Table 3: Availability of services per infrastructure options 
Availability of service as per MRD    
OS PRS SAR CS SoL 
Stand-
alone Yes Yes Yes Yes Yes (1) Baseline option 
With GPS Yes N/A Yes N/A Yes 
Stand-
alone Yes Yes Yes Yes No (2) Revised option 
With GPS Yes N/A Yes N/A Yes 
(3) Reduced services option Stand-
alone 
Close to MRD 
but limited 
robustness MRD 
compliant but 
limited Yes Yes No 
                                                 
78 These simulations are dependent on a number of assumptions that will be  updated according to how the system 
will actually perform once deployed, e.g. Orbit Determination and Time Synchronisation (ODTS) 
accuracy 
 
EN 39   EN robustness 
With GPS Yes N/A Yes N/A Yes 
Stand-
alone Mediocre 
accuracy and 
poor 
continuity Mediocre 
accuracy and 
poor 
continuity Yes longer 
localisation 
time and poor 
robustness Reduced 
capacity 
limited to 
Augmentation No (4) Degraded services 
option 
With GPS Reduced service 
level N/A Reduced service 
level N/A Degraded service 
level 
Stand-
alone No No No No No (5) 
Termination 
of the 
programme With GPS  N/A N/A N/A N/A N/A 
It is to be noted that the possi bility to interoperate with the US GPS, especially for option (3) 
and (4), allows an important improvement of this accuracy of the GPS signal but has several consequences: 
• The Galileo system will be partially or fully dependent on interoperability with US 
GPS .  Europe will not be able  to be one of the leaders for the GNSS innovation. It will 
lose its capacity to influence the future  navigation standards and will weaken the 
competitiveness of its industry in the area of applications and downstream technology 
developments precisely where most of  the navigation market is booming; 
• The Galileo system will not become a separa te global navigation satellite system as 
desired by the stakeholders, but rather an add-on to the US GPS . Consequently, the 
failure of one system will impact the combin ed performance of the systems perceived by 
the users, taking in to account that: 
- The operations of the Russian GLONASS syst em have suffered large disruptions. It 
took ten years before it could get its nominal capability back;
79 
- For the GPS system, the continuous effort to support the system has been also subject 
to internal US discussions;80 
These considerations are impor tant if looking at the prov ision of the OS, PRS and CS 
services. As regards SAR and SoL services: 
• The SAR service is operational with 18 equippe d satellites, and thus its performance does 
not depend on the number of satellites envisage d in the considered infrastructure options, 
though the degraded option (4) SAR could ge nerate longer localisation time and poor 
robustness due to potential  satellite break down; 
• The SoL service alternatives, looking back at section 5.1.1, are mainly depending on the 
deployed ground infrastructure. Option (1) will be able to provide a stand-alone SoL 
                                                 
79 The GLONASS constellation reached its optimal stat us of 24 operational sa tellites in December 1995. 
However, in the financially difficult period of 1989–1999, the Russian space program's funding was cut by 80% and, as a result, the constellation reached its lo west point of just 6 operational satellites in 2001. 
Strong political support led to the progressive  restoration of GLONAS S capabilities in 2011. 
80 The Governmental Accountability Office pointed out in its report " Significant Challenges in Sustaining and 
Upgrading Widely Used Capabilities", that "It is uncertain whether the Air Force will be able to acquire 
new satellites in time to maintain current GPS service without interruption. If not, some military operations and some civilian users could be adversely affected ". The GAO report further noted : " .. delay in the 
launch of the GPS IIIA satellites could still reduce the size of the constellation to below its 24-satellite 
baseline, where it might not meet the needs of some GPS users "
80.  Service available as per 
mission requirements  Service reduced  Service degraded  Service not available 
 
EN 40   EN service, option (2) and (3) will only be able to provide a SoL servi ce in interoperability 
with the US GPS and option (4) will not provide the SoL service; 
6.1.1.2.  Indirect benefits 
The European GNSS Agency has developed a GNSS market forecasting and public utility 
process to address the benefits  linked to the options and th eir service provision. It was 
developed to provide a solid source of mark et intelligence on GNSS and to measure the 
impact of the GNSS programmes and action plan s in terms of economic and public benefits. 
This model was developed with qualified consulting and economic partners and involved 
experts from all user segments. A bottom-up a pproach was followed to develop the model and 
was complemented with a top-down validation with key industry experts and stakeholders. 
The data is based on recognised reliable public sources and assumptions are based on experts’ 
consensus. To do so, more than 80 public databa ses and reports have been consulted and more 
than 20 experts have been interviewed. Th e methodology of the model together with 
assumptions used for calculating the indirect eco nomic, social and environmental benefits are 
described in detail in Annex VI. 
The core indirect economic, social and environmental benefits which will be further 
monetized can be divided in three main components: 
• The upstream market  and spill-over  for the EU-27 region is based on (1) gross value 
add of investments into space infrastructure  within the Galileo programme which result 
into an increase in disposable income that flows back into the economy via speding on services, equipment and transfer  of new technologies and cont ributes to EU GDP, and (2) 
spill-over effects of research and development investments. 
• The downstream market  growth for the EU-27 region re presents the additional growth 
of the GNSS applications market that is due  directly to the introduction of Galileo. 
Because the introduction of new technologies has a positive impact on the development of 
user applications based on th ese technologies (e.g. introduction of 3G boosted the mobile 
phones market). 
• Public benefits  for EU-27 region are externalities di vergently or indirectly generated by 
GNSS applications such as benefits for public institutions (VAT, corporate tax), benefits for users (time savings, fertilizer reduction) and benefits for society (CO2 reduction, noise 
reduction) 
Total cumulative monetised indirect benefits of the GNSS programme were calculated for a 
period based on a methodology detailed in Annex VIII in constant prices 2011 for a period of 
20 years from 2014 to 2034, see Table 4. 
 
Table 4: EGNSS indirect benefits per option – 2014-2034 
 Economic benefits Social and 
env. benefits  
(EUR bn/constant prices 2011) Upstream 
market growth Downstream 
market growth Public 
benefits Total benefits 
(1) Baseline option 19.94 26.43 87.41 133.77 
(2) Revised services option 19.94 26.43 87.41 133.77 
(3) Reduced services option 17.30 20.64 73.43 111.37 
(4) Degraded services option 14.83 15.36 64.84 95.04 
 
EN 41   EN (5) Termination of Galileo programme 6.76 1.27 15.02 23.05 
Source: European GNSS Agency 
EGNOS indirect benefits are included in all options. The last option implies Galileo 
programme termination, but EGNOS is exploi ted and services ar e offered. EGNOS is 
consequently the only driver of the benefits for option (5). 
There is an estimated upside potential of EUR 46 billion in total thr ough the acceleration of 
the GNSS market growth for options 1 and 2, but an active industrial policy is required to 
capture this upside. The Commission action plan designed in this respect has been dealt with 
in the Impact Assessment SEC(2010) 717 of 14th June 2010 on the Action Plan on Global Navigation Satellite System (GNSS) Applications. 
The GNSS market forecasting and public utility t ool can also estimate the general potential 
social and environmental impacts as non-monetised public benefits. However, the results of the model are applicable only to the baseline opt ion as adjustments to reflect the other options 
were not done. Consequently, the results of th e non-monetised indirect benefits estimations 
were not used as an argument in assessi ng the impacts of diffe rent policy options.  
For illustration, the potential social and environm ental impacts of option 1 are the following: 
• 6,000 jobs (Net jobs creation from 2015-2027) 
• 8,500 saved lives (Cum ulative until 2027) 
• 2,000,000 lives improved (Average from 2015-2027) 
• 1,2 trillion m³ of water sa ved (Cumulative until 2027) 
6.1.2.  Direct  revenues 
Apart from indirect benefits, di rect revenues are exp ected to be generate d through the services 
provided by the GNSS programmes. The Exploitation study
81 analysed possible revenue 
streams and indentified the Commercial Service  (CS) and the Public Regulated Service  
(PRS) as the two services expected to potentially generate direct revenues: 
• The PRS revenues mechanisms (license fees on  receivers, activation fees on receivers and 
access fees to signal) have been quantified based on the number of countries and users 
communities (defence, emergency services , law enforcement...) adopting the PRS 
• Two revenue mechanisms have been assessed for the Commercial Service, based on 
various underlying markets. Revenues relate to access fees for authentication services and 
High Precision Positioning Service (HPPS) 
The revenue analysis is based on a meth odology that took into account conservative 
assumptions in quantifying direct revenues by taking into account only  services that are 
currently being developed. The ra tionale behind this approach is  to avoid overestimating these 
revenues and to avoid creating assumptions th at in the medium term the European GNSS 
programmes can be fully self-financed. Such assu mptions in the past led to initiate the public-
private partnership that eventual ly collapsed (see chapter 2.2).  
The expected evolution of re venues from public regulated se rvice and commercial service 
over time is not beyond EUR 1.61 billion during the 20 years period, which amounts to less 
than 10% of the total costs for the next 20 years. It is clear that the European GNSS will not be profitable enough to be run on an independent basis and public  financing of costs will be 
                                                
 
81 Exploitation Study (2009), Roland Berger Strategy Consultants, commissioned by the European Commission. 
 
EN 42   EN necessary in the future.  The direct revenues will never have the potential to offset the 
operation costs of the programme s as detailed in chapter 6.1.3. 
It is to be noted that only direct revenues, i.e. where the Galileo service centre is able to 
identify charged users and automatically deny access to non paying users, have been taken into account. Additional indirect revenues for se rvices where automated denial of access is 
hardly conceivable (e.g. Safety of Life) c ould be envisaged thr ough indirect charging 
mechanisms. As there is no legal framework fo r such mechanisms, indirect revenues are not 
considered for the purpose of this impact assessment. 
On the basis of these conservative assumpti ons, European GNSS direct revenues will account 
for EUR 78-83 million a year on average in consta nt prices 2011 in the next 20 years (2014-
2034) period for policy options that provide both the PRS a nd the Commercial Service (see 
Table 5). 
Table 5: EGNSS potential direct revenues per option 
(EUR bn)/constant prices 2011 PRS min. and 
max. revenues CS revenues Total  2014-2034 
(1) Baseline option 0.24 – 0.34 1.32 1.61 
(2) Revised services option 0.24 – 0.34 1.32 1.61 
(3) Reduced services option 0.24 – 0.34 0.00 0.28 
(4) Degraded services option 0.00 0.00 0.00 
(5) Termination of Galileo programme 0.00 0.00 0.00 
Potential revenues from the aviation sector c ould also be expected from the SoL service 
offered by Galileo as this service could gradually replace existing infrastructure supporting aviation navigation and some landing approaches. However this possibility and the level of 
these potential revenues can only be analysed on ce the final characterist ics of the re-profiled 
service will be available. 
Potential additional revenues which could be exp ected from new features developed for next 
generation of Galileo systems, such as commercial telecommunication thanks to 
telecommunication payloads incorporated into Galileo satellites, have not been taken into 
account. Indeed the possibility that these reve nues occur depends on te chnical requirements 
which have not been thoroughly analysed yet.  
6.1.3.  Analysis of costs 
The options vary regarding the number of depl oyed satellites and the specifications of the 
ground segment. These changes have an impact on the total cost of th e programme. For each 
option, costs have been assessed not only for the completion of the infrastructure, but also for 
the following exploitation of the system: 
• Cost to complete the Galileo infrastructure: cover the activities to finalise the 
deployment phase of the programme in order to reach the full operational capability of 
the Galileo system by 2018-2019.  
•  Exploitation costs: cover the exploitation phase for both Galileo and EGNOS systems, 
comprising of operational management of the infrastructure, management of the 
services and the replacemen t, renewal of components w ith a limited service life, 
infrastructure protection (space situati onal awareness) They also include system 
 
EN 43   EN evolution i.e. ongoing improvements to the sy stems so as to adapt services to the 
changing needs of users. The exploitati on of the EGNOS system is ongoing, Galileo 
system is expected to reach initial operationa l capacity and to provide early services in 
2014-2015.  
These costs are assessed based on a detailed  internal methodology comprising of different 
cost groups for both Galileo and EGNOS pr ogrammes based on constant 2011 prices. The 
Galileo costs were segmented into 9 clusters (System Support, Ground segment, Satellites, 
Launchers, Operations, Site Hosting, Manage ment, New Generation Development and Other 
costs) and EGNOS costs. Each of the segments was analysed in detail, consisting of several 
cost drivers. For example, for the Ground segment in Galileo costs the main capital expenditure drivers are extensi on of the ground segment network, deployment of sites, full 
software qualification, and performance qualif ication. The EGNOS costs were based on 
extension of the coverage of th e system and operation costs of th e system. On the top of these 
costs, the impact of risks and contingencies were quantified, divided into space segment risks 
(launch, separation, in orbit tran sition, satellite failu re) and other risks (system development 
and operation/maintenance risks).  
This complex methodology has been developed ove r more than two years. All assumptions 
and cost drivers were presented in detail to representatives of Member States during meetings of the management committee in 2009 to 2011 and a number of dedicated bilateral meetings 
in 2011. These meetings were welcomed by MS departments which were impressed by the level of details and the robustn ess of all assumptions taken.  
The costs are modelled over a twen ty-year period in order to ta ke into account a complete 
lifecycle of the Galileo system, including the replenishment of the constellation and the potential development of a second generation. To reflect this, the cost estimations are divided 
according to 7-years periods of the EU mu ltiannual financial frameworks (MFF 2014-2020, 
and jointly for MFF 2021-2027 and MFF 2028-2034), as shown in Table 6. The termination 
of the Galileo programme also implies co sts concerning contr act cancellation, fees, 
dismantling costs, etc. next to the exploitation costs for EGNOS. 
Table 6: European GNSS programmes costs per option 2014-2034 
(EUR bn)/constant prices 2011 EU MFF 
2014-2020 EU MFF 
2021-2034  Total 
(1) Baseline option 7.8 12 19.8 
(2) Revised services option 7.0 11.5 18.5 
(3) Reduced services option 6.5 10.8 17.3 
(4) Degraded services option 5.6 10 15.6 
(5) Termination of Galileo programme 2.4 1.4 3.8 
6.1.4.  Sector-specific impacts 
Generally speaking, the EU industry benefits from  whatever enables it to reduce its costs, 
lower its prices, develop new products / services  and/or improve its ma rketing, sales, after-
sale model. This however does not automatica lly translate into an improvement of EU 
international competitiveness. Competitivenes s is a relative concept: EU industry is 
competitive by comparison with non-EU industries on the EU market and abroad. Its international competitiveness will therefore only improve if it makes faster and bigger progress than its non-EU competitors in terms of cost/price, innovati ve and/or commercial 
competitiveness. 
 
EN 44   EN Whenever possible and appropriate, the analysis  reviews in particular the impact on the 
competitiveness of the sector(s) targeted by the initiative, their supplie rs (upstream sectors) 
and their clients (downstream s ectors and end-users). In the present case, this value chain 
analysis encompasses four main segments: 
• Upstream : European space industry contributing to  the building of the global satellite 
navigation system  
• Service provision : European industry supplying commercial or public service 
positioning, navigation or timing services 
• Downstream : European applications industry de pending on service provision supplying 
hardware and software needed to exploit satellite signals  
• End-users : industries using services  and applications   
 
Figure 4: Value-chain of industri es affected by the GNSS programmes 
Particular attention is devoted to the European  applications industry a nd to end-users, where 
the biggest competitiveness impact is expected, applying a general argumentation as is used for the other parts of the value chain
82. 
The competitiveness impact of the various opti ons has been reviewed through a set of key 
questions including: 
• Cost/price competitiveness: Could  the implementation of the GNSS programmes 
increase competition among data providers & supporting industries? Could it lower the 
costs of doing business in Europe for certain downstream sectors? Could it increase their 
productivity? 
• Innovative competitiveness : Could the implementation of the GNSS programmes 
encourage product innovation, process innovation, leading to the creation of new markets 
or the establishment of new EU industrial sectors?  
• Commercial competitiveness : Could the implementation of the GNSS programmes open 
new opportunities for EU industry's marketing, branding, …? 
From a competitiveness viewpoint, the 5 infrastructure options id entified in sect ion 5.1 can be 
grouped into three clusters as depited in Figure 5. 
Figure 5: Clustering of infrastructure options used to review sector-specific impacts 
                                                 
82  cf. Annex IV – Sect or-specific impacts  

 
EN 45   EN 
 
Options (1) and (2) are likely to boost signifi cantly EU innovative compet itiveness, with the 
creation of new markets/business sectors. A positive impact is also expected in terms of cost and price competitiveness (for a high-level summary of the results of likely impacts on the competitiveness of the various sectors concerned, see Table 7 for a general presentation of the analysis and detailed examples, part 1) 
In order to illustrate the likel y impact on EU industrial competi tiveness, a sectoral analysis 
has quantified the impact of GNSS based applications on the market dynamics (see part 2). As an example, GNSS road transport is a wide-ranging and complex market segment combining mass-market applications (in-vehicle navigati on) and commercial applications. Moreover, 
GNSS is an enabling technology for intelligent tr ansport systems (ITS) including road user 
charging. 
The development of an European GNSS industr y would stimulate competitiveness through 
innovation . Technological innovation and new e-busines s models could signi ficantly shift the 
relative importance of the different markets and/or promote emergence of new business 
models. For instance, GNSS tracking systems can be applied to insurance in obtaining time usage and location travelled by insured vehicles. This will permit insurance companies to create pay per usage policies.  
It would also stimulate competitiveness through productivity gains . The rise of the road user 
charging based on GNSS solutions will lead to fulfilling the governments' objectives of 
reducing traffic congestions and its collateral damages to the economy and the environment, 
while motorway operators will improve the cost -effectiveness of their toll collection systems. 
Such systems already exist for instance in Germany and Austria, but these are based on signals that can be spoofed, while the introduct ion of Galileo will allow the operators to limit 
the level of fraud by its authen tication and integrity features. 
These two example technologies are emerging a nd will contribute to the growth of the GNSS 
road market to ~€30 bn worldwide by 2020 wi th an annual growth of 13.4%. The biggest 
driver for this growth will be the in-vehicle navigation market. The personal navigation 
device penetration rate in cars should reac h 80% by 2015 while in-vehicle devices will 
continue to growth to 50%  by 2025, with a continuous technologic evolution towards 
 
EN 46   EN dynamic route navigation and anti-theft featur es, improving safety, comfort and effectiveness 
of road travelling. 
Table 7: Summary of the competitiveness impact 
 (1-2) Baseline and 
revised services options (3-4) Reduced and 
degraded services 
options (5) Termination of 
Galileo programme  
Upstream + + + – 
Service provision + + + – 
Downstream +  + – 
End-users + + +  0 
Total + + + – 
– : negative impact on competitiveness  + : positive impact on competitiveness  
 
6.2. Analysis of impacts for problem 2: Gov ernance scheme for the exploitation of 
both Galileo and EGNOS systems  
While the choice of a way forward on the fu rther implementation of the European GNSS 
infrastructure (Problem 1) can be measured in terms of direct and indirect environmental, economic and social impacts agai nst required resources, the impact assessment of the choice 
of a legal and financing framework is less straightforward for various reasons: 
• The impact of the choice of a legal forms cannot  be measured against quantitative factors, 
nor can causal relationships be identified; 
• Programme costs and in particular required public sector human resources have been 
quantified against a work breakdown struct ure and not adjusted according to a legal 
structure. The cost analysis makes the assumption that an activity requiring one full-time equivalent in an intergovernmental organisation should require the same workload in an EU regulatory agency; 
On these grounds, measuring the impact of a spec ific legal form should aim at identifying the 
most efficient, effective, coherent lega l and financing framework for managing the 
exploitation of the European GNSS programmes. Th erefore, the options fo r problem 2 will be 
assessed qualitatively in terms of their complia nce with the objectives as outlined in section 
4.2. On these grounds, the impact of a specific lega l form will be identif ied and expressed in 
terms of their effectiveness, efficiency and c oherence with the legal and financing framework 
for managing the exploitation of the European GNSS programmes.  
6.2.1.  EU Regulatory agency  
Regulatory agencies have a variety of specific roles
83, set out in their own legal basis, case-
by-case (as opposed to executive agencies , which are set up under Council Regulation 
58/2003 to help to manage Community programmes84). There are no general rules governing 
                                                 
83 The Committee on Budget of the European Parliament, in its 2009 opinion on the Report on financial 
management and control of EU agencies (2008/2007 (INI)), stresses that " the term "regulatory agency", 
which is increasingly used as a generic term, is  misleading, as not all decentralised agencies have 
regulatory tasks ". It prefers the term " decentralised agencies ". Indeed, some of these agencies have 
operating tasks, as ERA, GSA, CFCA, FRONTEX, EUROJUST, EUROPOL and CEPOL. 
84 OJ EU L11/1 of 16.1.2003 
 
EN 47   EN the creation and operation of regulatory agencies  to date although this has recently been 
proposed by the Inter-institutional Working Group on Agencies85.  
In terms of effectiveness and coherence, EU regulatory agen cies allow a strong coherence 
between the European GNSS programmes' exploita tion and EU policies as well as offer per se 
an assurance of EU control and accountability as they are directly responsible to the discharge authority, the European Parlia ment, for budget implementation.  
Regarding efficiency, while the ge neral pattern of regul atory agencies has a clear interest in 
terms of operational flexibility, in particular  for human resources policy, the current legal 
framework, and in particular the EU Financial Regulation, is  not fully adapted to the 
management of large scale infrastructures nota bly as far as the procurement framework is 
concerned.
86  
While this assessment applies to regulatory agencies  in the general sense, it is clear that the 
European GNSS Agency (GSA) is the most suit able candidate amongst these and will require 
particular attention when developing a conc rete proposal for the governance of EGNOS and 
Galileo. The reasons for this are 
– the GSA's present involvement in the GNSS programmes and its already existing 
foundations of competence; 
– the general concerns over the growth in th e number of EU agencies which make it 
unlikely that Parliament or Council w ill accept the creation of a new agency; 
– the concern that best use should be made  of existing governance structures in the 
GNSS programmes, as stated in Council's C onclusions on the Mid-term review of the 
European GNSS programmes.87 
This said, it has also to be underlined that the GSA in its current form is not in a position to 
take over the governance of Ga lileo and EGNOS. Bearing in mind that the current mandate of 
the GSA is limited to security and market related issues, its tasks and decision making bodies 
would need to be redefined to manage the GNSS programmes. Also, the GSA currently does 
not have the appropriate financial and human resources to carry out programme management 
tasks under its own capacity.  
Therefore and to secure smooth and gradual tr ansition, the Commission could consider taking 
preparatory steps to enable the GSA to acquire  the necessary competence and credibility for 
its future role before the new legislative act enters into force (2014). This could for example 
take the form of the delegation of tasks linke d to the programmes in accordance with article 
16 c) of the GNSS Regulation. A scenario to be considered is notably the early transfer of 
activities related to the management of the EG NOS programme and/or of the preparation of 
                                                 
85 See European Parliament Conference of Presidents meeting minutes 05.05.2011, agenda item 5.1: 
http://www.europarl.europa.eu/Re gData/organes/conf_pres_groupes/p roces_verbal/2011/05-05/CPG_PV(2011)05-
05_EN.pdf   
86  See recommendation 1620 of Internal Audit Service's Audit of the GNSS Programmes (part: 
Governance, Risk Management and Project Management) of 14 April 2011 (Commission-internal 
document) which refers in particular to the use of firm fixed price contracts and to the inflexibility of 
budgetary periods. 
87  These call upon the Commission " to optimize and rationalize the use of existing structures and to give 
particular attention to the operational governance of EGNOS ".  Ref. idem footnote 26, see also Annex 
V for a link to the Conclusions. 
 
EN 48   EN Galileo operation, notably for the early services, subject of course to the GSA being endowed 
with the necessary resources. 
6.2.2.  EU public company 
A European public company, that is to say, a comp any with shares at least partly held by the 
European Union would raise significant  issues in terms of feasibility: 
• While purely corporate matters would be subjec t to the corporate law of the country of 
incorporation, rules would have  to be established in EU law (as is the case in most 
Member States) with respect to issues such  as governance, the opening of share capital 
and privatisation. Also, the stat us of EC civil servants s econded in the company would 
need to be clarified. However, for the creation of a status of an 'E U public enterprise', 
i.e. of corporations controlled by the Commission there are neither precedents nor 
clear rules; 
• The complexity of the work that would ha ve to be undertaken is illustrated by the 
areas for which legislation would have to  be proposed, includi ng (i) defining the 
procedure and conditions of a pproval of the investment of the EU in a company, (ii) 
determining the conditions of governance of  the company, (iii) sp elling out the rules 
applicable to the privatisation of such co mpany and (iv) clarifying and if necessary 
extending the mandate of the European Cour t of Auditors (as defined by art. 287 
TFEU) to cover also th e EU public enterprise.88 In short, the crea tion of an EU public 
enterprise will likely require putting in place a specific branch of EU law, a task that 
would need many years to be accomplished; 
• Furthermore, establishing an EU public co mpany will raise the same liability and tax 
issues as a private company; 
• Finally, the operation of such company would continue to be base d on the national law 
of its Member State of incorporation, raising questions as to its ability to fend off legal 
claims and attacks from hostile competitors. Also, in case of insolvency procedures these would be governed by the relevant domestic law, and the EC would have no or limited control on the liquidation of th e company although its liabilities could 
ultimately be imputed to the EU. 
In short, while an EU public company could have the advantages of a private sector company 
in terms of effectiveness and efficiency in  the commercialisation of services, it raises 
questions as to the feasibility of putting in place the legal prerequisites in a timeframe that is 
useful for the GNSS programmes. 
                                                
 
88 Although article 287 TFUE provides  that the mandate of the European Court of Auditors extends to " bodies, 
offices or agencies set up by the Union, in so far as the relevant constituent instrument does not 
preclude such examination."  Whether a company owned by the EU could be regarded as being among 
such categories could be challengeable. 
 
EN 49   EN 7. COMPARING THE OPTIONS  
7.1. Comparing the options for problem 1: Way forward on further implementation 
and exploitation of the European GNSS programmes 
Effectiveness 
Effectiveness related to compliance of policy options with the general policy objectives is 
based on a qualitative comparison of the techni cal characteristics of the options and their 
impacts as described in chapter 6.1 in combinat ion with detailed inform ation on effectiveness 
in Table 10. In Table 8 below the main fi ndings are summarised: the difference between 
options (1) and (2) is in  the provision of the safety-of-life service which in option (2) can be 
only provided in cooperation w ith GPS while all other servi ces can be pr ovided on the 
standalone basis. As regards the resilience of the EU economic infrastructure both options 1 
and 2 are equally fulfilling the criterion in both options a full backup system of the signal will 
be provided in case there is a signal disruptio n from other systems.  The sustainability of 
system performance under option (3) for the ope n service and PRS is weak, impacting the 
resilience of the EU economy relying on such  a system. Option (4) can only partially 
demonstrate Europe's ability to deploy and opera te a global navigation system while the other 
two policy objectives are not achieved at all as  the services would have very poor quality and 
the economic resilience would not be reinforced. 
Table 8: Compliance with general policy objectives 
 Set up an 
Independent GNSS Increase resilience 
of EU economic infrastructure Build Europe's 
technical GNSS capability 
(1) Baseline  
 100% 
 100% 
 100% 
(2) Revised services  
 75% 
 100% 
 100% 
(3) Reduced services 
option 
  75% 
 50% 
 100% 
(4) Degraded 
services option 
  0% 
 0% 
 25% 
(5) Termination of 
Galileo prog. 
  0% 
 0% 
 0% 
: No compliance to objective                                                    
 : Full compliance with objective  
Efficiency 
Efficiency of the policy options is assessed base d on the indirect benefits , direct revenues and 
costs which depend for each option on the number and quality of the services enabled. As the 
cost-benefit analysis in Table 9 shows, the associated cost containment between options 
appears to be rather low. This can be expl ained by the inflexibility of the ground segment 
design which offers poor cost containment op portunities resulting in to overall low cost 
elasticity of the options. The difference in cost s between option (1) and option (2) for a period 
2014-2034 is less than one billion EUR while deliver ing same indirect benefits. Option (3) in 
comparison to option (1) costs two billion EUR less while the difference in indirect benefits is 
much more substantial. Finally, the most de graded option (4) decreas es cost by only 20%, 
while having 30% decline in indirect benefits. 
In compliance with the Impact Assessment guidelines89, all cost, revenue and benefit figures 
in this chapter are discounted at a rate of 4% starting in 2014, though it alters  the amount of 
                                                 
89 European Commission, Part III: Annexes to Impact Assessment guidelines, 15 Ja nuary 2009, chapter 11.6 p71  
 
EN 50   EN budgetary needs expressed for the next Multi annual Financial Framework by artificially 
decreasing them. 
Table 9: Cost-benefit analysis of policy options: 2014-2034 
Indirect benefits Direct revenues Costs Net benefits (EUR bn) 
Constant prices 2011 and 
discounted prices at 4%  
Constant prices Discount. 
prices 
 Constant prices Discount. 
prices
 Constant prices Discount. 
prices
 Constant prices Discount. 
prices
 
(1) Baseline  133.77 81.26 1.61 1.05 19.8 14.65 115.58 67.66 
(2) Revised services  133.77 81.26 1.61 1.05 18.5 13.69 116.88 68.63 
(3) Reduced services 
option 111.37 67.59 0.28 0.20 17.3 12.80 94.35 54.99 
(4) Degraded 
services option 95.04 57.53 0.00 0.00 15.6 11.54 79.44 45.99 
(5) Termination of 
Galileo programme 23.05 14.00 0.00 0.00 3.8 2.81 19.25 11.19 
 
Coherence 
 
Coherence of the policy options w ith EU objectives, strategies and priorities is detailed in 
Table 10. There is no difference on this aspect be tween options (1) and (2) as both are in line 
with the EU political framework, have a high po sitive effect on the competitiveness of the EU 
industry and have a potential for strategic benefits  for the EU. Options (3) and (4) are similar: 
partially inconsistent with the EU objectives a nd priorities and with medium positive effect on 
competitiveness. Option (5) – termination of the Galileo programme – is not at all consistent with the declared EU objectives and has a negative impact on competitiveness.   
 
Summary  
 
Taking into account all impacts, aspects of effi ciency, effectiveness and coherence compared 
in Table 10 and in particular the poten tial cost savings, it appears that the option (2) – 
Revised services is the preferred option.  
 
 
EN 51   EN  
Table 10: Effectiveness – Efficiency – Coherence comparison for problem 1 
  Effectiveness Efficiency Coherence 
(1) Baseline 
option Achieves all general and specific objectives: 
- an independent GNSS, maximise indirect economic benefits and 
demonstrate Europe's ability to develop, deploy and operate a 
complex large-scale infrastructure,  
- services comply with the mission requirements and the GNSS 
regulation.  Costs of 19.8 bn EUR will 
be offset by high indirect 
benefits of 133.7 bn EUR 
in 20 years The long-term investment would enable positive trade-offs , especially concerning 
indirect benefits. 
Full development of industrial, techni cal and scientific capabilities and a high 
positive effect on competitiveness  of EU industry. 
Coherence with political agenda and EU objectives  (e.g. Treaty of Lisbon, 
Europe 2020, European Transport policy, etc.).  
Potential for strategic benefits  for the EU as global actor. 
(2) Revised 
services option Achieves most of general and all specific policy objectives :  
- the SoL service can be only provided through cooperation with 
GPS, hence the European GNSS not truly independent  
- maximise indirect economic bene fits and demonstrate Europe's 
ability to develop, deploy and operate a complex large-scale 
infrastructure. 
- services comply with the mission requirements and the GNSS 
regulation (except for independence of SoL service) 
 Costs of 18.5  bn EUR will 
be offset by high indirect 
benefits of 133.7 bn EUR 
in 20 years 
Most efficient solution 
regarding the cost – 
benefits analysis 
 The long-term investment would enable positive trade-offs , especially concerning 
indirect benefits 
Full development of industrial, techni cal and scientific capabilities and a high 
positive effect on competitiveness  of EU industry 
Coherence with political agenda and EU objectives 
Potential for strategic benefits for the EU as global actor 
(3) Reduced 
services 
option Does not achieve all general and specific objectives: 
- there is no independent GNSS, i ndirect economic benefits are not 
maximised, but it does demonstrate Europe's ability to develop, 
deploy and operate a complex large-scale infrastructure 
- if Galileo is to provide the services independently, some are 
reduced or degraded, so no achievement of full mission 
requirements  on all services  Costs of 17.3 bn EUR will 
be offset by indirect 
benefits of 111.3 bn EUR 
in 20 years The long-term investment would enable positive trade-offs , especially concerning 
indirect benefits – but less if compared with the baseline 
Medium development of industrial, technical and scientific capabilities and a 
medium positive effect on competitiveness  of EU industry 
Partly inconsistent with the EU declared ambitions  with Galileo being its 
flagship programme in the space policy and its contribution to the Europe 2020 
initiative 
(4) Degraded 
services option Does not achieve all general and specific objectives: 
- there is no independent GNSS, i ndirect economic benefits are not 
maximised, but it does demonstrate Europe's ability to develop, 
deploy and operate a complex large-scale infrastructure 
- if Galileo is to provide the services independently, some are 
reduced or degraded, so no achievement of full mission 
requirements  on all services  Costs of 15.6 bn EUR will 
be offset by indirect 
benefits of 95 bn EUR in 
20 years The long-term investment would enable positive trade-offs , especially concerning 
indirect benefits – but less if compared with the baseline 
Medium development of industrial, technical and scientific capabilities and a 
medium positive effect on competitiveness  of EU industry 
Partly inconsistent with the EU declared ambitions  with Galileo being its 
flagship programme in the space policy and its contribution to the Europe 2020 
initiative 
 
EN 52   EN (5) 
Termination 
of Galileo programme Does not achieve neither general, specific nor operational 
objectives , only EGNOS is available  
 Costs to terminate the 
Galileo programme, cost of 
3.8 bn EUR to operate 
EGNOS with minor 
indirect benefits in 20 years Loss of many potential positive impacts  on economic, social  and environmental 
matters 
No development of industrial, techni cal and scientific capabilities and a negative 
effect on competitiveness  of EU industry and on the European space industry  
Strongly inconsistent with the previous EU efforts in the space policy , would 
be coherent only in case of a major shift of policy priorities in the EU 
 
EN 53   EN 7.2. Comparing the options for problem 2: G overnance scheme for the exploitation 
of both Galileo and EGNOS systems 
The summary and comparison of possible legal set-ups for programme management and their 
compliance with objectives set in  section 4.2 is in Table 11.  
Following the comparison of impacts of the EU  Regulatory Agency and EU public company, 
it can be concluded that the EU regulatory agency  is the most appropriated to fulfil the 
objectives of programme management as this se t-up is highly coherent, effective and efficient 
from an EU point of view.  As mentioned in  chapter 6.2.1, the most a ppropriate existing EU 
regulatory agency to take on the programme management tasks is the European GNSS agency. 
 
EN 54   EN Table 11: Effectiveness – Efficiency – Coherence comparison for problem 2 
 
Baseline option: EU political supervision 
 
 Effectiveness  Efficiency  Coherence  
EU Regulatory 
Agency  • Strong feasibility: requires only ad-hoc EU legal 
basis to be established  
• Fast decision making through establishment of 
Administrative Board and Executive Director  
• Strong robustness: Proven legal scheme. Under 
umbrella of Art 340 and 343 of Treaty on the 
Functioning of the European Union  
 • Medium evolutivity, requiring amendments of the EU 
legal basis establishing the agency  
• Positive impact on EU economy: Focus put on 
maximise diffusion of servi ces and indirect revenues. 
However, to ensure efficiency, the agency will need to 
operate under ad-hoc rules in areas such as public 
procurement and human resources • Strong consistency with EU policies:  EU rules 
governing regulatory Agency establish objectives to be
pursued. Commission would have ability to control 
work programme of Agency to ensure consistency 
with EU policies 
• Strong EU control and accountability:  Through its 
supervision mandate on behalf of the EU, the 
Commission tightly control budget allocation, use of 
appropriations, etc. and the agency is subject to the 
control of the European Court of Auditors 
EU public 
company  • Very poor feasibility:  Neither precedent nor clear 
rules for the EU to create an EU public company.  
Lead time required to develop the legal framework is 
not compatible with the time perspective of early 
exploitation (2014-2015). 
• Fast decision making  and flexibility  similar to the 
ones of private sector companies  
• Poor robustness: the operation of such company 
would be based on the nati onal law of its Member 
State of incorporation, far less likely to be able to fend 
off legal claims and attacks from hostile competitors, 
difficult to wind up. It may face bankruptcy, contrary 
to an EU organ. Liabilities ultimately imputed to the 
EU in case of an undertaking under EU control • Poor evolutivity: requiring amendments  to the legal 
framework. Winding up of the EU public company 
would be very difficult as well as a transition to 
another public body.  
• Ambiguous  impact on EU economy: the EU public 
company will focus in the first place on maximising 
revenues and minimising expe nditures, the indirect 
benefits for the EU economy are secondary.  • Medium consistency with EU policies and EU 
control and accountability: EU ownership seems a 
good preservation of the main shareholder interests ,  
however, the identity of views is even better in the EU 
Regulatory Agency configuration where the EU has a 
direct hand on the management of the entity 
 
 
 
EN 55   EN 8. MONITORING AND EVALUATION  
The proposal, once adopted, will lead to the further implementation of the European GNSS 
programmes. Evaluation of these programmes w ill look into the achievements on a wide and 
diverse scale. 
8.1. Indicators 
Indicators related to fulfilment of specific policy objectives focus on the output – services to 
be enabled by the Galileo and EGNOS programmes,  the efficiency of their delivery and the 
effectiveness of the governance scheme managing them. Detailed indicators for global policy 
objectives are described in the Action Pl an on Global Navigation Satellite System 
Applications90 
Table 12: Indicators 
Level of objective Type of indicator Indicator 
Specific policy objective Output indicator - Characteristics, quality and specifications of 
the services of Galileo are in line with the GNSS regulation and the Mission Requirements Documents 
- Characteristics, quality and specifications of 
the services of EGNOS are in line with the GNSS regulation and the Mission Requirements Documents 
- The services of Galileo and EGNOS are 
delivered -target costs and on-target date delivery 
- The governance scheme for exploitation of 
Galileo and EGNOS is stable, sustainable and efficient 
General policy objective Result indicator - Competitiveness of the European based 
GNSS industry Widespread use of the services (market penetration, number of jobs created, market share etc.) 
- Indirect and direct be nefits enabled by the 
GNSS programmes  
 
8.2. Monitoring and evaluation  
The Commission will ensure that all contracts an d agreements concluded in the framework of 
the GNSS programmes will provide for supervision and financial control by it. Particular focus in all monitoring and evaluation mechan isms will be on minimising programmes' cost 
overruns and delays in deliv ering of the services.  
                                                
 
90 COM(2010)308 of 14.6.2010, Impact assessm ent, accompanying document to  the Communication of the 
European Commission on Action Plan on Global Na vigation Satellite System (GNSS) Applications 
 
EN 56   EN If need be, assistance of external technical experts will be requested when monitoring the 
implementation of the programmes. On the basis of the results of the on-the-spot checks, the 
Commission will ensure that, if necessary, the scale or the conditions of allocation of the 
financial contribution originally  approved and also the timetable for payments are adjusted. 
The Commission will propose:  
− a strategic framework including main actions, estimated budget and time-table 
necessary to meet the objectives of Ga lileo and EGNOS programmes at latest by 30 
June 2014;  
− an annual work programme translating the st rategic framework into detailed measures 
and indicators to be proposed at late st by 15 December of the preceding year; 
− an annual implementation report evaluati ng the fulfilment of the annual work 
programme to be proposed at latest by 15 March of the following year example; 
− an interim evaluation of the Galileo a nd EGNOS programmes focusing on quantitative 
and qualitative results so far achieved by 30 June 2017 in due time for preparation of 
the next multi-annual financial framework.  
Beyond these standard measures, the Commissi on in exercising its powers of political 
supervision over the Galileo and EGNOS prog rammes will strengthen the monitoring and 
evaluation mechanisms over the programme mana gement entity by requesting detailed annual 
management plans and implementation reports as well as steering  regular programme 
progress meetings and carrying out fi nancial and technological audits.  
In addition, the monitoring of  the programmes should associate Member States for example 
by relying on their technical cap abilities to provide input on technical monitoring of the 
programmes and on proposing key performance i ndicators against which the programmes will 
be evaluated.  
Finally, in the day-to-day management, th e Commission commits to propose a risk 
management mechanism and appropriate manageme nt tools to minimise the probability of 
programme cost overruns based on better cost es timation, taking stock of previous experience 
and actual system implementation.  
 
 
EN 57   EN 9. ANNEXES  
Annex I:  Overview of the Mid-term review 
Annex II:  Overview of the stakeholder consultations 
Annex III:  Studies and articles 
Annex IV:  Sector-specific impacts 
Annex V:  EU publications on GNSS 
Annex VI: GNSS Market Monitoring and Forecasting Tool: Methodology 
Annex VII:  Performance maps 
 
 
 
EN 58   EN ANNEX I - OVERVIEW OF THE MID-TERM REVIEW OF THE EUROPEAN SATELLITE RADIO 
NAVIGATION PROGRAMMES (COM(2011)  5 FINAL ) 
The European satellite radio navigation progr ammes are beyond the financial and technical 
capacity of individual Member States and theref ore fall within the comp etence of the EU. In 
addition and especially given thei r security requirements, all th e EU Member States have to 
be involved in them. 
Since the reform of the programmes' govern ance in 2007 the Commission has recorded 
several successes: EGNOS has become opera tional and is performing excellently, and 
progress is being made with the deployment of  Galileo. Parallel to this, several horizontal 
measures flanking the deployment of the infra structure have been taken on the regulatory 
front, with regard to international as pects and in respect of future uses. 
However, the programmes are now faced w ith fresh challenges arising from the 
materialisation of a number of risks which we re previously identified by the Commission, and 
the organisation of the programmes must be fu rther fine-tuned in orde r to increase their 
efficiency. The project has experienced cost overruns  attributable in particular to the increased 
cost of the development phase, the increased pr ice of the launchers, the lack of competition 
for the award of some packages and additi onal costs associated with the programme. 
Furthermore, the economic situation of the EU and its Member States has led the Commission 
not to seek, up to now, the allocation of add itional resources within the current multiannual 
financial framework, even though this is causing  delays in completion of the full deployment 
of Galileo and an increase in overall costs. 
A new basis for the work on the European satellite radio navigation programmes needs to be 
established so that progress can  continue without compromising the objectives laid down by 
the European Parliament and the Council. Acco rdingly, the recommended approach envisages 
the present organisation being maintained and improved over at least 10 years, although it will 
have to evolve in line with th e needs of the exploitation phase. 
On the political front, several decisions still need  to be taken. In a context in which Europe's 
economic and social progress is heavily depe ndent on mastering and using leading-edge 
technologies such as those rela ting to nuclear fusion, space, ai r traffic management and life 
sciences, it is important to r each decisions about the means, including budgetary means, of 
coping with the risks inhe rent in such technologie s. Conclusions also n eed to be reached on 
the development of the EU budget and on how the risks are to be apportioned between the EU 
and its Member States. The decisions laying down the budgetary and financial principles 
governing the continuation of the European satellite radio navigation programmes will need to 
be taken in parallel with thos e concerning the governance framew ork. This must seek to make 
all the players more aware of thei r responsibilities, in order to ensure an orderly transition to 
future governance arrangements while at the same  time enhancing control of the project and 
of its associated costs.  
 
 
EN 59   EN ANNEX II - OVERVIEW OF THE STAKEHOLDER CONSULTATIONS  
The European Commission participated at the fo llowing events in order to meet and discuss 
with a variety of stakeholders. The represen tatives of the Commission were invited as 
speakers to these events and the Commi ssion was usually present with a stand.  
Stakeholder Subject When and how 
Targeted consultations In 2009, 2010 and 2011 
Member states, downstream 
industry, industry associations, ESA, GSA − Future of the Galileo and 
EGNOS programmes 
− Future services provision, 
marketing, costs 
evolution, risk analysis, future governance In the frame of the 
Exploitation study (2009) which assessed the future evolution of the European GNSS programmes after 2013: 
− more than 50 interviews  
− 3 round tables 
Member states, ESA, GSA, 
selected industry experts − Problem definition  
− Assessment of policy 
options for completion of 
the Galileo system 
− Assessment of impacts − Joint working group 
(2010) to define possible options and their impacts 
− Meeting on the impact of 
various policy options 
(2011) 
− Cost analysis (2010) [,,,] 
Member states, ESA, GSA − Problem definition 
− Assessment of policy 
options for future 
governance 
− Assessment of impacts − Working group on future 
governance of the 
European GNSS programmes (2011) 
Public consultations In 2007 and 2009 
General public − Galileo programme 
− Satellite positioning 
systems Eurobarometer survey in 
June 2007 
General public − Space activities 
− Independent positioning 
system for Europe  Eurobarometer survey in July 
2009 
General public − Space programme 
− Importance of satellite 
based services Public consultation on a 
possible EU Space Programme in January - March 2011 
Conferences and workshops Only the latest conferences 
in 2010 are listed 
Political stakeholders, navigation specialists, navigation researches, − Satellite navigation, 
current status quo and 
trends − SAT Expo Europe 2010 
− Munich Satellite Summit 
2010 
 
EN 60   EN upstream industry 
representatives, downstream industry representatives − Satellite navigation 
applications 
− Satellite navigation 
research, FP7 
 − European Navigation 
Conference 2010 
− Galileo Applications days 
− Growing Galileo Info 
Day 2010 
Downstream industry focused on high precision applications − EGNOS for agriculture − DLG Field Days 
− Intergeo 
Downstream industry focused 
on aviation applications − EGNOS for aviation − Airport Exchange  
− ATC Global  
− Aero-Expo 
Friedrichshafen  
− EBACE  
− ILA Berlin  
− Farnborough Air Show 
− Europe Regional Airlines  
− SMAG 
Downstream industry focused 
on road applications − EGNOS for road 
transport − ASECAP  
Transport Research Arena  
 
 
 
EN 61   EN ANNEX III - STUDIES AND ARTICLES  
Strategic input 
– Position papers from the user communities (2009, 2010) : International Civil Aviation 
Organisation (ICAO), the European Organisa tion for the Safety of Air Navigation 
(Eurocontrol) and COSPAS-SARSAT an inter governmental organisation for search and 
rescue primarily on the requirements and expect ations of users on the quality of services  
– Exploitation Study (2009), Roland Berger Strategy Consultants, commissioned by the 
European Commission   
– Radio Frequency Interference Impact Assess ment on Global Navigation Satellite 
Systems  (2010), Joint Research Ce ntre, European Commission 
http://publications.jrc. ec.europa.eu/repository/bit stream/111111111/13508/1/reqno_jrc557
67_radio_frequency_interferen ce_impact_assessment_on_global _navigation_satellite_syst
ems%5B1%5D.pdf   
 
Reliance on GPS 
– Global Navigation Space Systems: re liance and vulnerabilities (2010),  UK Royal 
Academy of Engineering 
http://www.raeng.org.uk/news/publ ications/list/reports/Global_Navigation_Systems.pdf   
– Why Europe needs Galileo (2010),  European Space Agency 
http://www.esa.int/esa NA/GGG0H750NDC_galileo_0.html    
– GNSS and Critical Infrastructure of Electronic Communication (2010) , Research 
Institute of Posts and Telecommunicati ons Slovak Republic, commissioned by the 
Ministry of Telecommunication in the Slovak Republic  
– Vulnerability assessment of the transporta tion infrastructure relying on the global 
positioning system (2001) , John A. Volpe National Tran sportation Systems Center, , 
commissioned by Office of the Assistant S ecretary for Transportation Policy U.S. 
Department of Transportation 
http://www.volpe.dot.gov/gps/gpsvuln.html   
http://ntl.bts.gov/lib/31000/31300/31379/17_2001_Volpe_GPS_Vulnerability_Study.pdf   
– Global Positioning System Timing Critic ality Assessment Prel iminary Performance 
Results (2008) , John A. Volpe National Transportation Systems Center & Symmetricom, 
, 40th Annual Precise Time and Time Interval (PTTI) Meeting 
http://www.pttimeeting.org/archivemeetings/2008papers/paper43.pdf   
 
– How Vulnerable is GPS? (2001) , Avionics  
http://www.aviationtoday.com/av/issue/ feature/How-Vulnerable-is-GPS_12957.html   
 
 
EN 62   EN ANNEX IV – SECTOR -SPECIFIC IMPACTS  
General economic reasoning  
Present and future Global Navigation Satellite Systems provide a key enabling service for a 
rapidly growing number of business models an d goods and services. GNSS could in future 
become as important and as crucial for the Eu ropean economic fabric as are fossil fuels or 
telecommunication satellites today. 
However, for this growth and modernisation pot ential to materialise, the provision of GNSS 
services must be available (24 hours a day an d in each remote location) and accurate enough 
for the new business models and services. The risk in terms of security of  supply or abuse of a 
dominant position should also be minimal.  
The present situation cannot guaranteed this, as the market not only counts no independent 
European GNSS but is dominated by a non-Eu ropean monopoly supplier with a specific 
policy agenda. 
The services provided free of charge by the US -owned GPS has led to a mushrooming of new 
products and business models all over Europe and the developed economies. However, being 
a military project, the GPS comes with a severe security-of-supply risk for civil users. This 
obliges downstream users, as in the case of other products coming with  a security-of-supply 
risk, to invest in risk-mitigation strategies. 
In principle, the security-of-s upply risk together with the a buse-of-a-dominant-position risk 
negatively impacts on the cost competitiveness of  (European) business and clients. It requires 
indeed continuous investment in back-up t echnologies, which accounts for several billion 
euros per year91. 
Second, these risks serve as a premium for incumb ents on existing markets as they have built 
up the necessary old-fashioned knowledge th rough this hampering cost-reducing fiercer 
competition between incumbents and new market entrants. 
Third, these risks stand as serious impediments  to numerous new and cost-reducing business 
models along the whole value chain and across the whole economy that require (an absolute) 
security of supply – guarantee of service – and accuracy92. These opportunity costs resulting 
from the non-availability of an accurate, civil and reliable GNSS are difficult to estimate, as 
they relate to unobservable ma rket developments. However, the market potential for such 
services could reach in the tune of  several hundred billion euros per year93. If only a fraction 
of this was linked to cost savings  for industry and its clients, such  services could bring tens of 
billion euros of cost savings annually. 
The extent to which the cost-saving potential of a more accurate and reliable European GNSS 
would improve the cost competitiveness of Europ ean industry depends to a large extent on the 
                                                 
91  It is true that providing such back-up technologies also serves as a basis for traditional business models 
and jobs (in Europe). However, the economic value of business models and jobs providing services that 
help to better deal with existing market failures is typically inferior to solutions where the market 
failure itself is remedied. 
92  Cf. auto-piloted landing of aircraft or auto-piloted road-transport (passenger cars or light and heavy 
duty vehicles) on long-distance motorway trips. 
93  [Please refer to the numerous studies quoted on  this in other parts of the impact assessment.] 
 
EN 63   EN speed and quality of activating this cost-saving potential in Europe as compared to other 
regions of the world. Indeed, as GNSSs provide their servic es globally and without any 
regional discrimination, other economies also benefit from the cost-saving potential of a 
European GNSS for as long as its signal co mes free of charge and without encryption. 
Thus, the existence of a signifi cant cost-reduction potential for the European industry does not 
automatically translate into an improvement of  the international cost-competitiveness of the 
European industry. Such improvement requires great efforts from the European industry to 
actually go for this cost -reduction potential. But these effort s also need to be supported by a 
more holistic, deliberate and ambitious Euro pean innovation, modernisation and growth 
strategy: the Europe 2020 strate gy. Concretely the European industry needs a credible 
assurance that the Galileo initiat ive has reached a point of no return and that exit from this 
ambitious project is no option. Without this pl anning security, European  industry will not be 
in a position to fully go for harvesting th e cost-reduction poten tial sketched above. 
    
 
              
 
EN 64   EN  
 
EN 65   EN Table 13: Sector-specific analysis of competitiveness impacts   Cost / Price competitiveness Innovative competitiveness Commercial competitiveness Upstream With the full deployment of the satellite constellation, the European 
Space industry would have to buy larger quantities of components. 
Because of the better conditions granted to larger customers, its input 
costs would go down. This effect c ould be significant for this industry 
as it depends mainly on institutional markets  
The operations and renewals of  full system should also bring 
economies of scale and increase productivity. 
 
 
 
  
 – (1-2)  high positive effect due to pe riodic renewal of the whole 
system 
– (3-4)  lower positive effect, due to degraded system and associated 
development of the industry 
– (5) no effect on competitiveness  The build-up and operations of Galil eo allows hundreds of European 
companies (ranging from multi-billion EUR conglomerates to 
specialised SMEs) to grow and invest  more in R&D. This should be a 
key competitive advantage for the space industry, which is 
characterised by long-term in vestments and realisations.  
If Galileo is terminated, the technolog y developed specifically for this 
programme might become useless or  quickly obsolete (there was no 
off-the-shelf technology for services that only Galileo provides). 
European companies would then loose their early R&D investment 
(sunk costs) linked to that specific technology. They might have to 
seek fresh risk capital and pay a premium for having invested in vain in Galileo. 
 – (1-2)  high positive effect due to high R&D investments in the 
industry 
– (3-4)  smaller positive effect due to degraded system and 
associated lower investments compared to baseline options 
– (5) negative effect, resulting from the likely lost of some of the 
early R&D investment  Having contributed to the most advanced GNSS could be used to strengthen the image of EU satellite 
industry. Besides marketing benefits, it would 
provide additional references that could help 
securing future (public pr ocurements) contracts. 
 
 
 
 
 
  
 – (1-2)  medium positive effect building on the 
"most advanced system" effect 
– (3-4)  smaller positive effect 
– (5) no effect 
 
 
EN 66   EN  Cost / Price competitiveness Innovative competitiveness Commercial competitiveness Service providers The current structure of the industry  is quite particular. There are only 
four entities operatin g or developing a GNSS (US, Russia, EU and 
Chinese public operators). The US and Russian operators offer 
location signals free of charge (open service), which is now 
considered by users communities as a vested right. The other 
operators intend to follow the same  business model. In other words, 
there is no market price for this service. The policy option chosen on 
further implementation of the European satellite navigation 
programmes can therefore not affect the price competitiveness of this 
EU industry. 
EGNOS improves the open public serv ice offered by the GPS.Similar 
regional augmentation systems are developed in Japan and India. 
These systems operate on a regional basis and don't compete on other 
regional markets. The policy option c hosen will therefore not affect 
either the competitiveness of this GNSS sub-segment made of 
regional monopolies. 
The price competitiveness of the commercial services supplied by the 
GNSS industry is not threatened by  substitute products as none can 
match the quality of its data. Development in the GNSS industry 
could even speed up structural adjustments by precipitating the 
decline of alternative technologies (such as the Real Time Kinematic 
System).  
Guaranteeing the long term devel opment of the EU GNSS industry is 
likely to have a positive effect on its  cost competitiveness. This would 
put it in a better position to negotiat e with its suppliers. It would for 
instance not have to pay a premiu m for engineers kept on stand by 
upstream industries, in case a large GNSS order would come.  
– (1-2)  limited positive effect on cost competitiveness; no effect on 
price competitiveness 
– (3-4)  no effect on cost / price competitiveness  
– (5) not applicable (if the EU GNSS industry disappears, its 
competitiveness is no longer an issue)   Galileo system has a potential to bring major innovation regarding data accuracy, availability and integrity (security features 
guaranteeing that the data are authentic), to become a market 
differentiator and to provide a universal and global solution for legal 
value to positioning and timing. 
If the programme is terminated, the quality of the services provided 
by EGNOS might suffer in the long run, as EGNOS would have to 
continue to rely for a long time on the sole ageing GPS and Glonass 
systems. 
   
 
     
 
    
– (1-2) high positive effect due to framework conditions for new 
technological development the cr eation high investments and the 
capacity to provide improved data 
– (3-4)  smaller positive effect due to degraded system and lower 
investments 
– (5) possible negative effect on EGNOS  Largely irrelevant con sidering the structure of this 
industry and the nature of this market 
 
EN 67   EN  Cost / Price competitiveness Innovative competitiveness Commercial competitiveness Downstream With reassurance on long term pr ovision of Galileo signals, the 
applications industry w ill move more quickly to mass market stage in 
a number of cases, which would br ing large economise of scale. 
Telelommunication operators in particul ar could play a key role in the 
up take of mass market services such as location based services or 
road transport related services. They are expected to pursue 
partnerships or acquisistions to guarantee a complete offer to end-
users.  
The development of new products a nd services are also likely to 
increase economies of scope. Sect ors such as telecommunications, 
electronics, …, are indeed often able to cut their costs by providing a 
variety of products rather than specialising in a single output. 
The arrival of large players fro m other industries (cf. telecom 
operators) should increase competiti on and contribute to improve EU 
industry's price competititveness. This  would be espacially the case 
where customers are very price-sensitive and face low switching costs 
(such as with Personal Navigation Devices). 
The number of EU competitors could increase in a number of niche 
markets with relatively low entry ba rriers, which would have a similar 
effect on price competitiveness, but to a limited extent (as niche 
markets' customers are often less price-sensitive, paying more 
attention to the performance of the product / service).  
Without a credible signal that th e Galileo initiative has reached a 
point of no return and that exit from this ambitious project is no 
option, European industry will not be in a position to fully go for 
harvesting the cost-reduction potential  sketched above. Options that 
don’t fondamentally deal with the s ecurity of signal supply & abuse-
of-dominant-position risks woudl not result in significant 
competitiveness improvments.  
 
– (1-2)  medium positive effect  
– (3-4)  smaller positive effect 
– (5) no effect 
 The development of the EU GNSS industry and the provision of 
bettter GNSS signals will favour th e emergence of a whole range of 
new added-value applications for end-users including:  
* LBS (Location Based Service, an  information and entertainment 
service accessible through mobile phones); 
* ADAS (Advanced Driver Assistance System); * ISA (Intelligent Speed Adaptation); * Road user charging applications with more reliable authentication.  * more accurate and continuous positioning for the aviation industry 
Innovation should also be based on increasing hybridisation with 
other technologies (e.g. WiFi, supporting the development of indoor 
positioning applications). 
European chipset manufacturers are expected to benefit from the 
direct involvement in the Gal ileo programme, gaining worldwide 
market share. This EU industr y is indeed engaged in the 
miniaturisation of GNSS receivers, the reduction of power 
consumption, …, increasing technologi cal complexity in the receiver. 
The 7
th FP94 is supporting the devel opment of thes e downstream 
activities. This could therefore secure "first-mover" advantages which 
are often very precious to preserve  or increase its competitiveness.  
Here again, if the programme is terminated, the technology developed 
specifically for this Galileo based applications is likely to become 
useless or quickly obsolete (loss of sunk costs). 
  
 
 – (1-2)  medium positive effect due to high investments and 
associated high spill-over 
– (3-4)  smaller positive effect due to degraded system and lower 
investments/ spill-over 
– (5) no or negative effect due to the loss of early R&D investment   The GNSS programmes are not expected to have a 
major impact on the marketing, sales or after-sales 
processes of this industry, expect perhaps for the 
liability guarantee provided the EU GNSS industry. 
                                                 
94 The Seventh Framework Programme for research and technological development (FP7) is the Commissions main instrument for fundin g research over the period 2007 to 2013 
 
EN 68   EN  Cost / Price competitiveness Innovative competitiveness Commercial competitiveness End-users The introduction of advanced GNSS-ba sed applications in a growing 
number of sectors would lead to bett er allocation of resources, cost 
reduction and efficiency gains. These are for instance expected for  
* road user charging (thanks to the authentication service),  * logistics flee t management  
* rail freight management (thanks to the continuity and availability of 
Galileo) 
* management of electricity grids * precision GNSS is expect ed to become a productivity tool in sectors 
such as construction, mining, agriculture 
This effect should be moderate ra ther than high because GPS already 
supplies similar services. Thanks to interoperability, Galileo would 
allow to enlarge the size of the relevant markets and the expected 
positive externalities. 
 – (1-2)  medium positive effect due to the improvement of the 
functioning of existing markets and higher productivity 
– (3-4)  smaller effect 
– (5) no effect (as this option would deprive EU end-users from an 
opportunity) 
 EGNOS / Galileo-based applicati ons provide many opportunities to 
European based firms in terms of product innovation and 
differentiation such as: 
* pay-per-use insurance (car insura nce based on driving type, pattern 
and travelled kilometres) 
* tourist and rescue services * new techniques of law enforcement   
 
 
 
 
 
 – (1-2)  medium effect due to the process/product innovation and the 
creation of many new markets or segments 
– (3-4)  smaller effect due to lesser technologic evolution 
– (5) no effect (as this option would deprive EU end-users from an 
opportunity)  Too many different (potential) end-users to draw 
general conclusions. 
 
     
 
EN 69   EN Specific study on GNSS exploitation  
An extensive study95 has been done to understand the mark et dynamics of sectors affected by 
the European GNSS Programmes and the impact of these programmes on their competitiveness. 
First, a market segmentation has been done  based on existing Commission's studies and 
external reports. Second, through several 'r ound-tables' with experts and end-users and 
numerous interviews with stak eholders throughout the value chain, a th orough market review 
has been carried out for the most important ma rkets. Finally, an assessment of the demand by 
2020 was performed. 
Following sources were us ed during this study: 
General studies: Galilei (All markets), 2003 
ProDDAGE, (All markets), 2006 
ABI (All markets), 2007  
IDC (Location Based Services - LBS),e  
LEK (LBS, Road, Rail, Maritime, PRS), 2008 
LEK (Industry mapping), 2008 Gartner, 2008 
Position Report, 2008 
Market Monitoring & Forecasting Tool, 2009 
JD Power Q1, 2009 
MMFT, 2009 Euromonitor, 2008 
Sector specific studies on applications:  
 AGILE (LBS), 2007  
GIANT (Aviation), 2006  
GIROADS (Road), 2005  
GRAIL (Rail), 2006  
MARUSE (Maritime), 2006  
Position One (High precision), 2008  
GIGA (Energy), 2005  
Harrison (Timing), 2007  
Pacific (PRS), 2007  
HELIOS (EGNOS Aviation), 2008  
HELIOS (LBS), 2008 
Studies used for business modelling: OVUM (GOC revenues), 2006 
OVUM (GOC revenues), 2001  
PWC (GOC Business plan), 2001  
PWC (Scenario update), 2007 
The GNSS markets have been segmented in various  axes, of which the 'type of usage' and the 
'end user industry' are the most relevant. By adopting an application based approach, more 
than 100 applications have been identified  and segmented according these axes. This 
segmentation provided eight macr o independent segments with homogenous features to be 
deeply analyzed in the strategic assessmen t: Road segment, LBS segment, High accuracy 
segment, Aviation segment, Timing segment, Authentication segment, Robust positioning segment and Data broadcasting segment. These priority segments have been selected based on a set of quantitative and qualitative features, such as market  attractiveness and public benefits. 
As an example, the road segment strate gic assessment is detailed hereunder. 
                                                
 
95 Exploitation Study (2009),  commissioned by the European Commission 
 
EN 70   EN Market analysis for road applications  
GNSS market size [€bn, worldwide] Main demand drivers on PNT market
Assessment of GNSS potential Opportunities & threats for GNSSGNSS market size [€bn, worldwide] Main demand drivers on PNT market
Assessment of GNSS potential Opportunities & threats for GNSS19,822,0 21,82,35,08,129,9
27,0
22,1
ProductsServices
2020 2015 2010•Increasing demand for location based services
• Significant decrease in navigation devices prices (PNDs
and In vehicle devices)
•I m p r o v i n g  capabilities and performance of GNSS 
receivers and related applications
• Increasing awareness of social, economic and 
environmental consequences of road traffic increase
• On going national and European regulations (e-Safety, 
road tolling interoperability...)
•Navigation applications will continue their growth due to 
the increasing penetration rate of navigation devices and 
the development of improved content
•F o r  Road User Charging , the GNSS solutions will be the 
preferred solution for only very specific situations (large 
networks with complex tolling policies). Current conceded 
highway operators are unlikely to switch to the GNSS
based solutions
• Advance Driver Assistance Systems are unlikely to 
develop before 2020 and GNSS solutions will not be the 
key technology for their implementation• Opportunities:
–Regulatory evolutions could enable the development of 
some applications:
- Implementation of the interoperability of toll systems 
within Europe (directive 2004/52)
- Implementation of e-Safety European regulation
– Multiplication of tenders for electronic toll collection
systems in Europe
•T h r e a t s :
– Well established competitive technologies on 
promising applications (toll collect, e-call, ADAS)
–Unclear business models linked to future ”public 
enabled“ applications (e.g. e-call business model)+13,4%
+1,0%CAGR 10-20
 
1. Market definition  
GNSS road transport is a wide-ranging and co mplex market segment combining mass-market 
applications (in-vehicle navigation) and co mmercial applications. Moreover, GNSS is an 
enabling technology for intelligen t transport systems (ITS) in cluding road user charging. 
The market, as perceived by the en d user, is definitely wider th an that of services provided 
through GNSS solutions. In a number of instances,  the consumer opts not for a technology but 
for a complete service that meets his or her re quirements, not necessari ly based on GNSS. In 
all case, GNSS road transport applications require: 
 an adequate signal or combin ation of signals from the satellite constellation and the 
corresponding ground segment, 
 a device, in-built by the vehicle manufact urer or portable mobile handset and  
 a commercial or public entity with the required f acilities (ground infrastructure, reliable 
and updated content sources, etc.) and entrepre neurial capacity to de liver and manage the 
service 
2. Demand drivers and trends 
Demand drivers The following factors will foster the take -up of GNSS-based road applications:  
 the necessity for public authorities and ro ad users to avoid traffic congestion;  
 the increasingly widening policy amongst munici palities aiming limiting the use of cars in 
urban areas for public health  and environmental reasons; 
 safety concerns (emergency calls, ADAS, etc),  
 eco-driving and eco-routing to reduce the CO2 emissions 
 
EN 71   EN  a continuous reduction in the prices of car rece ivers and more integrat ed services available 
(e.g. traffic information, weather fo recast, increase map-updating, etc); 
 the growing processing power of handsets; 
 trend towards the systematic inclusion by th e automotive industry of GNSS receivers in 
new cars; 
 the gradual entry into service of intelligen t transport systems aiming at for example a 
better integration of the overall logistic chain or more adaptable public transport 
management services. 
The factors of risk that could hamper the de velopment of GNSS-based road services are: 
 insufficiently agreed standards, that may lead  to a vertical integration between services 
providers and receivers manufacturers and t hus to a decreased competition on the market; 
 the absence today of technical solution ensuri ng the authentication of a position produced 
by a GNSS receiver; 
 Inconstencies in regulatory  ini tiatives concerned with positioning. 
 
Market trends 
Personal Navigation Devices have been the main  driver for the car navigation market. The 
sales of affordable, feature-ric h, and easy to use PNDs have gr own more than 100% in recent 
years, with companies such as Garmin, TomT om, and Mio dominating the market. Features 
such as speech recognition, multimedia playbac k, and digital cameras have recently become 
available on high-end PND devices.  
Factory-installed navigation sy stems and aftermarket navigation solutions have been much 
less popular due to high prices and lack of porta bility. It is however expected that factory-
installed systems sales will continue to grow as it is offered on more vehicles at lower prices.  
Car navigation devices will face increasing competition from converged handset-based 
software solutions. Off-board handset-based navigation will be offered by cellular carriers 
guaranteeing always up-to-date maps, traffic, and content. Positioning represents a relatively new field of development and business, with presumably a large potential.  
At the beginning, the market was developed th anks to the introduction of navigation devices 
by vehicles manufacturers in upper range cars and trucks. However, in the recent years, major 
growth has been fuelled by availability of  inexpensive personal navigation devices. The 
market for installed in-vehicle navigation system s has remained largely stagnant over the last 
ten years. Some experts point out that there has been low responsiven ess in car makers to 
GNSS-related innovation la g compared to vehicle adapted personal navigation device (e.g. 
Tom-Tom or Garmin).  
This market nevertheless evolves from the pi oneering phase to mass ma rket penetration. For 
example, in-vehicle navigation is quickly gaining market share under the push of hand 
portable device based solutions. Other applica tions like road use charging and intelligent 
speed assistance could become widespread in re latively short time. As of 2008, the market for 
GNSS-based services was growing more rapidly than the number of new vehicles in Europe 
and North America. 
When looking at the potential of satellite posit ioning in these target markets, the general 
outlook is that satellite positioning will have a more and more rele vant role in road transport, 
both in mass-market and niche market applications . GPS is already widely used in in-vehicle 
navigation, both in embedded system and system  based on nomadic devices and is set to 
become a ubiquitous enabling technology for IT S. Currently U.S. Wi de Area Augmentation 
 
EN 72   EN System (WAAS) and EGNOS enabled receivers are beginning to become the default GPS 
receiver bringing improvements  in accuracy and making the in tegrity signal available for 
applications involving user depe ndence, licensing and safety. 
Finally, eleven PNT applications have been identified so far in the Road segment, 6 been 
already existing or emerging in the market. This is illustrated in Figure 6. 
Figure 6: Review of identified positioning, navigation and timing applications in Road transport 
market 
 
3.  Current market size and estimation of potential 
Methodology to measure market size 
Revenues for operators marketing road applicati on products or services will derive from two 
sources – the sale of GNSS enabled receivers, with one-off income for the seller, and the 
provision of services related to specific valu e added components, to content, to updating 
functions, paid in the form of  irregular fees (e.g. depending on usage) or of subscriptions. 
Hence, the total market size will, for each appli cation, be a combination of sales of receivers 
and services at a certain price le vel, applied to a more or less expanded population of vehicles.  
Estimates of market size 
For the road segment, forecasts differ signi ficantly from a study to another although on 
similar perimeters. For example, in the horizon 2020, estimated revenues96 vary between € 70 
and € 120 billion in th e respectively worst a nd best case scenarios97. Under the most 
                                                 
96  In terms of sales figures for equipment and related accessories (software updates, maps, etc) 
97  Cf. Proddage (2006), Helios (2008), LEK, ABI - Revenues are “gross” revenues based upon the whole price 
paid by users to acquire an application. They are therefore a measure of overall business generated by GNSS 
rather than a measure of GNSS specific business 
 
EN 73   EN conservative existing assumptions, the value gene rated by Road applications would approach 
€ 50 billion by the beginning of the 2020s98.  
This study has reviewed the assumptions develo ped under previous studie s. This review has 
led to a more careful scenario as to the tota l number of vehicles du ring the next decades, 
taking into account a post-crisis environment in which demand will grow at a reduced pace, in 
a more general context of depl etion of fossil resources and in creasing concerns on greenhouse 
gases emissions99.  
This revised assumption leads to an even mo re conservative set of predictions. The total 
GNSS market size for road accounts for €30bn by 2020. The GNSS product enabled market 
size ranges from €16bn to €34bn, with a conserva tive scenario accounti ng for €22bn as shown 
in Figure 7. 
Figure 7: Assessment of Galileo’s impact on Road  Segment – Focus on product enabled market 
 
4.  Detailed review of the main road segment applications 
Among all existing or potential applications, we propose to examine in a more detailed 
manner the most promising applications, comb ining both a large market size (and thus 
presumably accounting for indirect benefits) an d significant direct reve nue potential for the 
prospective GALILEO Operating St ructure (direct benefits).  
The navigation applications and positioning ma nagement applications will be detailed 
hereunder. In Figure 8 the typology of these kind of applications is ex plained and in Figure 9 
the value chain is detailed. 
                                                 
98  Cf. Based on a review of underlying assumptions in the various estimates. Th e forecast focuses on long 
trends; it goes beyond the current economic context, assu ming moderate growth rates of the overall number of 
vehicles in service.  
99  By doing so, this study, contrary to previous ones performed in the early years 2000, has considered it 
impossible for the existing long term demand trends to continue without any significant alteration.  
 
EN 74   EN Figure 8: Typology of road applications 
 
Figure 9: Typical value chain by typology of application 
 
I. Navigation applications 
Best itinerary services  
Two different types of applica tions should be distinguished. In  basic systems, navigation is 
totally managed by an onboard unit including a digital map and will limit itself to providing 
the best theoretical itinerary between two points.  In the most sophisticated devices, the real-
time traffic information provided by a service operator will help the onboard device to optimize its proposal to the driver  according to criteria which will be more generally the time 
spent. The second application (the real-time one) is the most promising for the future. 
Overall, the use of an onboard GNSS termin al provides vehicle location and time that 
facilitates the provision of serv ices aimed at improving the safe ty, comfort and effectiveness 
of road travelling using two-way data and voice communications between a service provider 
and an end-user in a vehicle. Typical examples  of commercial services  to vehicle users are 
route navigation (static or dynamic) or theft al arm and recovery.  Many of these services are 
provided on a subscription basis. 
Telematics is a combination of telecommunicati ons and network compu ting. More precisely, 
in the automotive sector, telematics consists of information services delivered to a remote in-
vehicle device over a wireless communications network. Telematics systems are already used 
 
EN 75   EN to deliver valuable data for a va riety of applications and are expected to gr ow substantially in 
the future.  
Penetration rates should continue to increase, th e presence of on-board un its, either built-in or 
portable, increasingly becoming a standard feature of a vast majority of  new vehicles as the 
price for terminals is likely to decrease over tim e. Navigation applications are generally based 
on open service signals only. The improvement in accuracy will result, if needed, from the use 
by the terminal of more than one cons tellation, including Galileo or of EGNOS. 
ADAS (Advanced Driver Assistance Services)  
Advanced driver assistance systems (hereafter ADAS) are intended to increase car safety and 
more generally road safety by helping the driv er with vehicle control and thus avoiding 
accidents caused by human errors. ADAS take into account not just the driver and the vehicle 
but also the immediate driving environment. By receiving information from outside of the 
vehicle, the systems are able to assess the ri sk of an accident occuring. Then, the systems can 
either warn the driver so as to take avoi dance steps or can auto matically initiate the 
appropriate actions. An indicative list of ADAS  classified on their level of autonomy or 
integration in an cooperative ITS e nvironment is provided in Table x. 
 
Advanced Driver A ssistance Services 
Autonomous Cooperative 
Cruise Control (CC) Cooperative ACC 
Adaptive Cruise Control (ACC) Intelligent Speed Adaptation 
Lane departure warning/lane keeping assistant Curve speed warning Collision Avoidance Cooperative in tersection collision avoidance 
Emergency braking systems Local hazard warning Electronic Stability Programme (ESP) Vehicle platooning Driver condition warning Autonomous driving Pre-crash protection of vulnerable road users In-car traffic information / data collection 
Lane Change Assistant Post crash warning 
 Most of the aforementioned ADAS require vehi cle positioning mechanisms and thus involve 
the use of an onboard GNSS terminal. In partic ular, GNSS is critical for ADAS co-operative 
systems where assistance is provided from road ways and/or from other vehicles, requiring the 
exchange of Position Velocity Time (P VT) information. Of course, ADAS requires 
information not only from a GNSS receiver but  also from other onboard sensors, vehicle 
radars and actuators or information receiv e by other vehicles or the roadside ITS 
infrastructure. Location is one of the parameters  needed, especially as it allows map matching 
with the memory of the system. Thus high acc uracy (sub-metre), availability and integrity 
with short time to alarm (in the order of 1s) are required. 
Considering that ADAS is a safety  critical application, the cert ification of Ga lileo and of the 
ADAS equipment will be needed as is the cas e in the aviation or marine domains.  
 
EN 76   EN The term ADAS covers a variety of applications  differing from the environment in which they 
are relevant, from the functionalities o ffered, from the degree of automation and 
symmetrically the level of autonomy left to the driver in the vehicle. This family of applications involves issues related to liabi lity in case of malfunc tioning of the system 
resulting in damages to the driver, to the pa ssengers or freight and/ or to third parties. 
ADAS is considered by the large majority of experts and stakeholders to materialise in the 
long term only as it is still necessary to ach ieve significant progress in  market awareness and 
to overcome strong cultural and psychological impediments.  
The main obstacles today to the advent of ADAS are:  ADAS requires the simultaneous availability of  a number of different technologies, 
probably both embedded in the vehicle and in the infrastructure. These technologies are in 
some cases still under development and in some  other cases their combination is not yet 
fully mastered. 
 ADAS requires the availability of  a number of infrastructures and of their regular update. 
A typical example is maps, which need to fu lfil certain quality requirements, include a 
number of additional attributes compared to  today’s situation and guarantee being up-to 
date to ensure safe operations . This is clearly not yet achie ved on a large coverage basis. 
 The mass-market introduction of ADAS require s solving a number of regulatory issues 
like, for instance, certification proce dures as explained above, standard and 
interoperability as well as liability in case of malfunctioning; it also assumes a readiness 
by end users to entirely trust de vices and applications supposed to replace, to a significant 
extent, their own inte lligence and judgment. 
 The cost of ADAS is still prohibitive for intr oduction on lower segmen t vehicles and user 
willingness to pay seems to go more in the dire ction of comfort systems rather than safety 
systems. 
In conclusion, ADAS is still in its infancy comp ared to the penetration rates that have been 
achieved by the navigation systems. Contrary to the navigation market, where firm trends can 
already be perceived, there is currently no seri ous hint of what mark et take-up would look 
like. It is likely that it will be resulting by the combinatio n of regulation, vehicle makers' 
differentiation strate gies and reaction by customers. 
 
II. Positioning management applications 
eCall – Emergency Call Services
 
eCall stands for "automatic in-vehicle emerge ncy call system". The eC all system is based on 
either the automatic detection of an accident  or a manual eCall made by pushing a button. In 
both cases a voice communication is opened to th e emergency centre after a small delay due 
to the automatic transmission of the Minimum Set of Data (MSD), including time-stamp, vehicle location and propulsi on type of the vehicle.  
The data of the vehicle location and direction at  the time of the accident is obtained from the 
GNSS receiver.  Today, by means of GPS, the lo cation can be determined to within 10 metres 
using absolute positioning. In the future, Gal ileo will allow the positioning be even more 
precise, i.e. within one metre.  
The use of such accuracy will for instance al low a motorway operator to discriminate on 
which side of the road the accident occurred, wh ich is an important information to drive the 
nearest rescue team to the place and to warn drivers going in the same direction.  
 
EN 77   EN The receiving of an automatic emergency call does not alter the process at the emergency 
centre but the procedure is the same as with a usual emergency call. The goal is that the data 
packets transmitted by the eCall system can give  the Public Safety Answering Point (PSAP) 
operator all the necessary information needed for the placement of an emergency call. After the eCall device detects an acci dent it transmits to the mo st appropriate PSAP the MSD 
containing the following information: 
 Timestamp 
 Vehicle location and dire ction (provided by GNSS) 
 Vehicle propulsion storage type 
 Number of passengers (if available) 
The implementation of the eCall service require s equipping vehicles with eCall in-vehicle 
systems. It requires also the transmission of the eCalls by the Mobile Network Operators (MNOs) and the upgrade of the PSAPs.  
The harmonised implementation of an interope rable EU-wide eCall service in the EU has 
been in the agenda of the European Commi ssion since 2005 and has become now a priority 
action for the improvement of road safety  and the deployment of ITS in Europe.  
All major stakeholders direc tly affected by eC all are supporting it s deployment under the 
condition that the implementation will be undertaken in parallel by all ac tors (mainly OEMs, 
MNOs and PSAPs). More than 80% of the peop le responding to the public consultation find 
the eCall system useful and they would like their vehicle to be e quipped with eCall.  
Numerous studies on eCall have shown that th e system can potentially avoid around 4% of 
the road fatalities per year in Europe and reduce the severity of injuries  by a factor around 
6%. eCall can also have a significant impact on the reduction of the congestion caused by the 
traffic accidents and thus the overall congestion of the European roads. 
A great variety of GNSS applications can today be  found in transport and this is expected to 
significantly increase. Ju st to name two, traffic manageme nt is improved through GNSS road 
tolling and real-time travel information is provi ded directly to the driv er to avoid congested 
areas. The introduction of the eCall system in the vehicles could also contribute significantly 
to the deployment of a European market fo r GNSS applications, widely promoted by the 
European Commission which has recently (J une 2010) adopted an Action Plan for the 
development of the applications of GNSS. Intelligent Transport System for Road is one of the main focus of this Action Plan. 
 Finnish Market research  
The most complete research on the impacts of an automatic emergency call system (eCall) on 
accident consequences has been carried out in Finland
100. The key evaluation results of that 
study indicate that the eCall system could very  probably have prevente d 4.7% of the fatalities 
in accidents involving motor-vehicle occupants. In the accidents involv ing fatal unprotected 
road user, however, the system could probably ha ve prevented no fatality. In all, eCall system 
was estimated to be able to reduce 5–10% of motor vehicle fatalities and 4–8% of all road 
fatalities in Finland.  
The results showed that, in most accidents in volving motor-vehicle occupants (82%), the 
emergency call had been made within five minut es of the accident. However, in 14% of the 
                                                 
100  The technical report is published in Finnish (Virtanen 2005) 
 
EN 78   EN cases the emergency call had been made 5–30 mi nutes after the accident and in approximately 
4% of the cases more than 30 minutes after the accident. In the accidents involving fatal unprotected road user, the delays were slightly shorter. The be nefit-cost rati o of the eCall 
system examined in this study was estimated to be in the range of 0.5–2.3. The benefit-cost 
ratio would have been higher if the indirect benefits of the eCall system could have been 
taken into consideration.  
Based on the main findings of this study, the eCall system was recommended for immediate 
and widespread implementation in Finland. Th e study also indicated a need for developing 
statistics on severely injured accident casualties.   
The consumers are also interested in emergenc y call systems. An interview of almost 100 
drivers made in March 2004 revealed that an au tomatic emergency call system is the second 
most required accessory or service for a vehicle.  Only anti-lock brakes were deemed more 
essential. The necessity of an automatic emer gency call system compared to other equipment 
was not affected either by the annual kilometres  driven or whether the driver drove mainly on 
rural roads or in towns. One th ird of the drivers were willin g to pay 100-299 euros for eCall 
equipment and one third 500-999 euros. (Min istry of Transport an d Communications of 
Finland 2004). 
 
Road user charging (RUC)
 
The main objective of road user charging ba sed on GNSS solutions is linked to policies 
developed by the Member States  to fight congestion, finance th e maintenance of the roads, … 
Most systems are based on electronic means to speed up the toll collection process,. 
Road user charging has often been presented as a sub-market with a po tentially high potential, 
as interest of governments is increasing for reducing traffic conges tion and its collateral 
damages to the economy and the environment, wh ile improving safety for road users, whereas 
motorway operators logically seek to improve the cost-effectiveness of their toll collection systems. 
 
To date, road user charging is applied in Eu rope almost exclusively on motorways, or if 
extended to a larger network, it is limited to certain categories of vehicles like trucks (Germany, Austria, Slovakia, and Czech Republic).  Usage in urban environments is so far 
only in operation for a very limited downt own area of large conurbations, like London, 
Stockholm and Milan, but could gain momentum w ith growing concerns of public authorities 
for avoidance of traffic nui sance in urban areas.  
 
Growing congestion problems and greening of tran sport initiatives clearly represent the main 
opportunity to foster GNSS-based RUC systems in the EU. This opportunity is hampered 
today because of market fragmentation of th e industry, with lack of common standards, 
patchwork of different systems applying in different geographical  areas and lack or disparity 
of regulation. The co-existence of European RUC systems ba sed on different technologies 
raises the problem of interoperabi lity across different countries. 
So far, progress of electronic (or 'virtual gate ') tolling fee collection has been slow, in the 
absence of legal obligations, desp ite advertising efforts on the side  of operators. It is estimated 
that no more than 6% of European vehicles are equipped with adequate devices allowing 
electronic fee collection. 
Currently, the technology used in most national systems is a non-GNSS microwave 
technology called 'Dedicated Short-Range Communications' (DSRC). Another wireless 
 
EN 79   EN technology used in RUC is a combination of GNSS and GSM-GPRS. The first European 
satellite-based toll collection syst em is Toll Collect in Germany.  
Non GNSS based solutions seem to be most appropriate for motorways, and will probably 
remain so, except if the legal and technical co nditions of use of GNSS for tolling allow the 
operators to limit the percentage of fraud to th e level they have with competing technologies 
like DSRC.  
GNSS based solutions are technically more a ppropriate for dense ne tworks of roads and 
streets, especially as they do not require huge investments in  roadside equipment. GNSS- 
based solutions offer advantages  in the following situations: 
 dense and complicated networks  of tolled roads with no planned tolling facility (toll 
plazas, gantries…)  
 widespread tolling (e.g. most highways, a nd not only motorways, become subject to 
tolling), 
 possible interoperability with networks a nd countries already equipped with GNSS tolling 
mechanisms.  
In general, a GNSS-based road tolling implies huge sunk or stranded cost at the beginning101 
(the German Toll Collect cost more than 3.4 b illion to the German au thorities). However, 
alternative systems are expensive too. A comp arative cost-benefit analysis covering all 
relevant cost-factors and the cycl e of economic life (obsolescence)  of the altern ative solutions 
could justify GNSS-based system for motorw ays usage, e.g. at pan-European level. 
Beside these factors related to the cost of infrastructure, a ma jor differentiator in favour of 
Galileo should be in its value added, i.e. its in tegrity and authentication functionalities, which 
might help reducing fraud possibilities. However,  the assessment of the operators faced with 
technology choices will result from a balance of the advantages and shortcomings of each 
solution, each of them being appraised in a sp ecific national environment determining the 
structure of the road network and the ownership of the roads102.  
It is not absolutely certain that the need to re duce collection evasion is so  high as to lead toll 
collecting operators to give preference to a technical solution that, in some cases, will appear as less cost effective than other available tec hnologies. At first sight, there is no clear-cut or 
compelling reason justifying a systematic reso rt to GNSS based solutions, each case being 
assessed on its own merits in th e light of a specific context. 
Legislative initiatives in  favour of road tolling would give  a boost to penetration of virtual 
road tolling. It would be justified by the necess ity to increase the fluidity of road traffic
103, 
especially for trucks, and by environmenta l concerns. The extension of tolling for 
environmental purposes to large parts of national networks104, far beyond the mere motorways 
would clearly favour GNSS. In addition, achie ving the European initiative in favour of 
interoperability should incite to use the most widespread system, or that of the leading EU economy.  
                                                
 
101  Sunk costs are start up costs that cannot be recovered if the business project fails. 
102  The fragmentation of ownership between hundreds and even thousands of public authorities will certainly 
be a major impediment to the emergence of unified tolling schemes even at national level, not to speak from the 
European level. The adoption of GNSS at a large scale would definitely be easier in the case of motorways 
exploited by a limited number of operators. Market penetration will thus probably be slow for highways of the 
secondary network.  
103  The fact that Germany was an early adopter of GNSS based solutions could contribute to foster this 
technology, given the central place of this Member State in the European Union.  
104  Cf. Commission's Communication on the greening of transport.   
 
EN 80   EN However, under the principle of technological a nd thus market neutrality, no EC legislation 
can clearly impose the resort to GNSS solutions, provided that the objec tives (e.g. a single 
invoice) are met. Directive 2004/52/EC, in this rega rd, consistent with this principle, mentions 
GNSS-based solutions among other alternative possibil ities and thus gives no particular 
support to those solutions.  Moreover, sin ce 2004, very limited progress has been seen on 
this field and no major legislative breakthrough can be foreseen in the near future to boost 
market take-off.  
Against this background, the available for ecasts need to be treated with caution105.  
 Tracking of special vehicles
 
Commercial and consumer vehicle tracking can also be applied for fleet management, work-
force management, stolen vehicle recovery and insurance. Vehicle-tracking devices consist of 
a location and communication module.  
In Europe, uptake has been slowed up until now due  to a fragmented market, lack of end-to-
end services, complexity, the absence of standa rds, and privacy issues. However, uptake is 
expected to accelerate if, for example fragmenta tion and lack of harmonisation problems at 
European level are addresse d in the years to come.  
Most GPS vendors are only active in a limited numbe r of market segments, such as in-vehicle 
navigation and vehicle tracking. Garmin and Trim ble are the main vendor s that have designed 
products for a wide range of applications and se gments. Garmin is active in a large number of 
consumer segments such as in-vehicle navi gation, marine, recreational, aviation, animal 
tracking, and communication.  
Trimble is the main vendor of industrial applicat ions such as machine control, surveying and 
mapping, vehicle tracking, timing, and military. Both companies have been very successful in 
leveraging their broad engineeri ng and manufacturing skills, incl uding GPS, radio, laser, and 
sonar across many applications and segments.  
It is expected that with the launch of additional GNSS systems such as GALILEO, new 
applications such as tourism, culture, and train-tracking will emerge, as companies are 
exploring new opportunities to capitalize on the increased precision and reliability of GNSS-
positioning.  
 
                                                 
105  They vary, according to different studies, between 830 M€ and 1.2 Bn € in 2025.  
 
EN 81   EN ANNEX V - EU PUBLICATIONS ON GNSS 
Regulations 
2010 – Regulation (EU) No 912/2010  of the European Parliament and of the Council of 22 
September 2010 setting up the European GNSS Ag ency, repealing Council Regulation (EC) 
N° 1321/2004 on the establishment of structures fo r the management of the European Satellite 
Radio Navigation programmes and amending Re gulation (EC) No 683/2008 of the European 
Parliament and the Council  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2010:276:0011:0021:EN:PDF
 
2008 – Regulation (EC) No 683/2008  of the European Parliament and of the Council of 9 
July 2008 on the further implementation of th e European satellite navigation programmes 
(EGNOS and Galileo)  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2008:196:0001:0011:EN:PDF
  
2006 – Council  Regulation (EC) No 1942/2006  of 12 December 2006 amending Regulation 
(EC) No 1321/2004 on the establishment of struct ures for the management of the European 
satellite radio-navigation programmes  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2006:367:0018:0020:EN:PDF
  
2006 – Council Regulation (EC) No 1943/2006  of 12 December 2006 amending Regulation 
(EC) No 876/2002 setting up the Galileo Joint Undertaking  
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2006:367:0021:0022:EN:PDF   
2004 –  Council  Regulation (EC) 1321/2004  on the establishment of  structures for the 
management of the European satellite radio-navigation programmes  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2004:246:0001:0009:EN:PDF
  
2002 – Council Regulation (EC) 876/2002  setting up the Galileo Joint Undertaking 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2002:138:0001:0008:EN:PDF   
 
Council resolutions and decisions 
2011 – Council conclusions on the Report fr om the Commission to the European 
Parliament and the Council Mid-term review of  the European satellite radio navigation 
programmes, 3080th Transport, Telecommunications a nd Energy Council meeting Brussels, 
31 March 2011 http://register.consilium.eur opa.eu/pdf/en/11/st08/st08395.en11.pdf
  
 2007 – Council Conclusions on launching the European Global Navigation Satellite 
System Programmes , 2835th Transport, Telecommunica tions and Energy Council meeting , 
Brussels, 29-30 November/3 December 2007 http://register.consilium.eur opa.eu/pdf/en/07/st15/st15891.en07.pdf
 
2007 – Council Resolution on Global Navigation Satellite System (GALILEO): state of 
play and future options , 2805th Transport, Telecommunications and Energy Council 
meeting, Luxembourg, 6-8 June 2007 /1 June 2007  
http://register.consilium.eur opa.eu/pdf/en/07/st10/st10126.en07.pdf  
2006 – Council Conclusions on the progress of the GALILEO programme  - 2754th 
Transport, Telecommunications and Ener gy Council meeting Luxembourg, 12 October 2006 
http://register.consilium.eur opa.eu/pdf/en/06/st13/st13496.en06.pdf  
 
EN 82   EN 2004 – Council Decision 2004/578/EC  of 29 April 2004 on the c onclusion of the Framework 
Agreement between the European Community and the European Space Agency http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2004:261:0063:0063:EN:PDF
 
2004 – Council Joint Action 2004/552/CFSP of 12 July 2004 on aspects of the operation of 
the European satellite radio-navigation system affecting the security of the European Union 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2004:246:0030:0031:EN:PDF  
2004 – Council Conclusions on the European Glo bal Navigation Satellite System (GNSS)  
- Transport, Telecommunications and Energy Council meeting, 11 June 2004 
http://register.consilium.eur opa.eu/pdf/en/04/st10/st10507.en04.pdf  
2002 – Council Conclusions on Galileo programme  - 2472th Transport, 
Telecommunications and Energy Council meeting, 5-6 December 2002 
http://register.consilium.eur opa.eu/pdf/en/02/st15/st15121.en02.pdf  
2001 – Council Resolution of 5 April 2001 on Galileo  
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:C:2001:157:0001:0003:EN:PDF  
1998 – Council Decision 98/434/EC  of 18 June 1998 on the agreement between the 
European Community, the European Space Agency and the European Organisation for the Safety of Air Navigation concerning a European  contribution to the development of a Global 
Navigation Satellite System (GNSS)  [Official Jour nal L 194 of 10.7.1998] 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=CELEX:31998D0434:EN:HTML
 
 
Parliament resolutions 
2007 – European Parliament resolution of 26 April 2007  on the Galileo concession 
contract negotiations http://eur-lex.europa.eu/LexUriServ/Lex UriServ.do?uri=OJ:C: 2008:074E:0752:0753:EN:PDF
 
 
Commission communication, deci sions and work programmes 
Commission communication 2011 – Communication from the Commission  n° 5 to the European Parliament and the 
Council on the mid-term review of the Europ ean satellite radio na vigation programmes 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2011:0005:FIN:EN:PDF
 
2010 – Communication from the Commission  n° 308 to the Council, the 
European Parliament, the European Economic and Social Committee and the Committee of the Regions on the Action Plan on GNSS applications http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2010:0308:FIN:EN:PDF
 
2009 – Communication from the Commission  n° 302 to the European Parliament and the 
Council on the implementation of the GNSS programmes and on future challenges  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2009:0302:FIN:EN:PDF
 
 
EN 83   EN 2007 – Communication from the Commission  n° 534 to the European Parliament and the 
Council on progressing Galileo: re-prof iling the European GNSS programmes 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2007:0534:FIN:EN:PDF  
2007 – Communication from the Commission  n° 261 to the European Parliament, the 
Council, the European Economic and Social Committee and the Committee of the Regions on Galileo at a cross-road: the implementa tion of the European GNSS programmes 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:C:2007:256:0073:0075:EN:PDF
 
2006 – Communication from the Commission  n° 272 to the Council and the European 
Parliament: Taking stock of the Galileo programme  http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2006:0272:FIN:EN:PDF
 
2006 – Communication from the Commission  n° 769 : Green Paper of 12 December 2006 
on Satellite Navigation Applications  
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2006:0769:FIN:EN:PDF  
2004 – Communication from the Commission  n° 636 : Moving to the deployment and 
operational phases of the European sate llite radio navigation programme  
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2004:0636:FIN:EN:PDF  
2004 – Communication from the Commission  n° 112  to the European Parliament and the 
Council - Progress report on the Galileo resear ch programme as at the beginning of 2004 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2004:0112:FIN:EN:PDF  
2002 – Communication from the Commission  n° 123  to the European Parliament and the 
Council - Integration of the EGNOS pr ogramme in the Galileo programme 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2003:0123:FIN:EN:PDF  
2002 – Communication from the Commission  n° 518  to the European Parliament and the 
Council - State of progress of the Galileo programme 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:C:2002:248:0002:0022:EN:PDF  
2000 – Communication from the Commission  n° 750  to the European Parliament and the 
Council on Galileo http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2000:0750:FIN:EN:PDF
 
1999 – Communication from the Commission  n° 54  - Involving Europe in a new generation 
of satellite navigation services http://eur-
lex.europa.eu/Notice.do?val=334306:cs&la ng=en&list=334306:cs,& pos=1&page=1&nbl=1&
pgs=10&hwords  
2008 - Report from the Commission COM/2009/0302  to the European Parliament and the 
Council on the implementation of the GNSS progra mmes and on future challenges pursuant 
to Article 22 of Regulation (EC) No 683/2008 http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2009:0302:FIN:EN:PDF
  
 
Commission decisions 
 
EN 84   EN 2010 – Commission Decision of 6 October 2010  setting up the group of experts on the 
mission evolution of the European navigation satellite systems, the ‘Mission Evolution 
Advisory Group’ http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:C:2010:271:0002:0003:EN:PDF
 
2009 – Commission Decision of 20 April 2009  establishing an expert  group on the security 
of the European GNSS systems http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2009:101:0022:0024:EN:PDF
 
2008 - Commission Decision C(2008)8378  of 12 December 2008 adopting the Strategic 
Framework of the GNSS Programmes 
 
Commission work programmes 
2010 – Commission Decision C(2010)1617 of 23 March 2010 concerning the adoption of a 
financing decision for 2010 in the framework of  the European satellite radio-navigation 
programmes (EGNOS and Galileo) 
2009 – Commission Decision  C(2009)2227  of 3 March 2009 adopting the 20098 Work 
Programme of the European Sate llite Radio-navigation Programmes 
2008 – Commission Decision C(2008)8371  of 12 December 2008 adopting the 2008 Work 
Programme of the European satellite radi o-navigation programmes (EGNOS and Galileo) 
 
International agreements 
China 2003 – Proposal for a Council Decision on the signing of the Cooperation Agreement on a 
Civil Global Navigation Satellite System (GNSS) - GALILEO between the European 
Community and its Member States and the People's Republic of China http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2003:0578:FIN:EN:PDF
 
Israel 
2004 – Proposal for a Council Decision on the signing of the Cooperation Agreement on a 
Civil Global Navigation Satellite System (GN SS) between the European Community and its 
Member States, and the State of Israel http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2004:0286:FIN:EN:PDF
 
Korea 
2006 – Cooperation agreement on a Civil Globa l Navigation Satellite System (GNSS) 
between the European Community and its Member States, of the one part, and the Republic of 
Korea, of the other part 
http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2006:288:0031:0042:EN:PDF  
2006 – Council Decision of 1 September 2006 on th e signing, on behalf of  the Community, of 
the Cooperation Agreement on a Civil Global Na vigation Satellite System (GNSS) between 
 
EN 85   EN the European Community and its Member States, of the one part, and the Republic of Korea, 
of the other part http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2006:288:0030:0030:EN:PDF
 
2006 – Proposal for a Council Decision on the signing of the Cooperation Agreement on a 
Civil Global Navigation Satellite System (GN SS) between the European Community and its 
Member States and the Republic of Korea http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2006:0141:FIN:EN:PDF
 
Morocco 
2006 – Proposal for a Council Decision on the si gning of a Cooperation Agreement on a Civil 
Global Navigation Satellite System (GNSS) between the European Community and its 
Member States and the Kingdom of Morocco http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2006:0220:FIN:EN:PDF
 
Norway 
2010 – Cooperation Agreement on Satellite Naviga tion between the European Union and its 
Member States and the Kingdom of Norway http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2010:283:0012:0020:EN:PDF
 
2010 – Council Decision of 11 March 2010 on the si gning and provisional application of the 
Cooperation Agreement on Satellite Navigation be tween the European Union and its Member 
States and the Kingdom of Norway http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=OJ:L:2010:283:0011:0011:EN:PDF
 
2010 – Proposal for a Council Decision on the signing of the Cooperation Agreement on a 
Satellite Navigation between the European Community and its Member States and the 
Kingdom of Norway http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2009:0453:FIN:EN:PDF
 
Ukraine 
2005 – Proposal for a Council Decision on the signing of the Cooperation Agreement on a 
Civil Global Navigation Satellite System (GN SS) between the European Community and its 
Member States and Ukraine http://eur-lex.europa.eu/LexUriServ/L exUriServ.do?uri=COM:2005:0350:FIN:EN:PDF
 
US 
2004 – Signature of EU/US Agreement: Agreem ent on the promotion, provision and use of 
Galileo and GPS satellite-based navigati on systems and related applications 
http://ec.europa.eu/enterpri se/policies/satnav/galileo/f iles/2004_06_21_eu_us_agreement_en.
pdf 
 
 
 
 
EN 86   EN Other publications 
Galileo 
– Brochure on Europe's Satellite Navi gation Programmes - Galileo and EGNOS 
http://ec.europa.eu/enterprise/policies/satn av/galileo/files/galileo-and-egnos-yellow-
brochure-2008_en.pdf  
– Galileo Open Service Signal In Space Interface Control Document (OS SIS ICD) 
http://ec.europa.eu/enterprise/policies/satnav/g alileo/files/brochures-leaflets/galileo-os-sis-
icd_en.pdf  
– Galileo, EGNOS and GMES 
http://ec.europa.eu/enterprise/policies/satn av/galileo/files/brochures-leaflets/galileo-
egnos-gmes-brochure_en.pdf  
– GNSS applications 
http://ec.europa.eu/enterprise/policies/satnav/g alileo/files/brochures-leaflets/applications-
leaflet_en.pdf  
– Key results of the sixth research fram ework programme for satellite navigation 
http://ec.europa.eu/enterprise/policies/satnav/galileo/files/brochures-leaflets/fp6-
results_en.pdf  
– Press release on the Public Regulated Service (PRS) of Galileo 
http://ec.europa.eu/enterp rise/policies/satnav/galil eo/files/ip-10-1301-prs_en.pdf  
– Press release "New funding for the trans-Eur opean energy and transport networks, Galileo 
and Marco Polo from 2007 to 2013"  
EGNOS 
– EGNOS Service Definition Docu ment – Safety of Life 
http://ec.europa.eu/enterpri se/policies/satnav /egnos/files/brochures-leaflets/egnos-
brochure_en.pdf  
– EGNOS Service Definition Document - Open Service 
http://ec.europa.eu/enterprise/policies/satnav/egnos/files/egnos-service-definition-
document-open-service-v1.1-30-10-2009_en.pdf  
– EGNOS User Guide for Application Developers 
http://ec.europa.eu/enterp rise/policies/satn av/egnos/files/cnes-user-guide-egnos-
2009_en.pdf  
– Leaflet EGNOS for Agriculture 
http://ec.europa.eu/enterp rise/policies/satn av/egnos/files/e gnos_agriculture.pdf  
– Leaflet EGNOS for Aviation 
http://ec.europa.eu/enterpri se/policies/satnav/e gnos/files/2009_egnos_a viation_leaflet.pdf  
– Leaflet EGNOS for Road User Charging 
http://ec.europa.eu/enterpri se/policies/satnav/e gnos/files/egnos-road-leaflet-gsa_en.pdf  
– Leaflet EGNOS for Mapping 
http://ec.europa.eu/enterprise/policies/satn av/egnos/files/egnos-for-mapping-flyer_en.pdf  
– General EGNOS leaflet 
http://ec.europa.eu/enterprise /policies/satnav/index_en.htm  
 
EN 87   EN – General EGNOS brochure 
http://ec.europa.eu/enterpri se/policies/satnav /egnos/files/brochures-leaflets/egnos-
brochure_en.pdf  
 
EN 88   EN ANNEX VI: GNSS  MARKET MONITORING AND FORECASTING TOOL: METHODOLOGY  
The GNSS Market Monitoring and Forecas ting Process (hereafter MMFP) provides 
understanding of today's GNSS market and forecas ts of future developments. Its objectives 
are in particular to: 
− provide a solid source of market intelligence on GNSS in Europe, notably to establish 
the real size of the main dow nstream market segments: location based services (LBS), 
aviation, agriculture and road transport (ext ension to maritime and mapping planned in 
future); 
− measure the impact of the GNSS programme s and action plans in terms of economic 
and public benefits; 
− provide a tool to s upport policy decisions by res ponding to requests of market 
estimation and scenario analysis; 
− have a viable forecast based on present knowledge and be able to compare alternative 
scenarios that represent different visions on how the market will evolve. 
This model has been developed with highl y qualified economic and business consulting 
partners and involved experts from all user se gments. Data is based on recognised reliable 
primary public sources and grouped by applicati on and by region which enables more detailed 
analysis.  Assumptions are based on experts’ c onsensus. In the data gathering process more 
than 80 public databases and repo rts were consulted and more than 20 experts interviewed. 
The tool is flexible and the European GNSS agen cy is able to update it with latest data and 
run different scenarios. 
The tool contains two models: 
1. Market Model  that aims at mapping out the GN SS market, identifying geographical 
opportunities and key segments for the European  industry. It is us ing a selection of 
econometric methodologies, based on availabilit y of data and on the suitability to the 
drivers and market trends and evolution. 
2. Public Utility Model  aims at providing an estimate of  the overall economic value of 
the GNSS market, in particular the imp act of EGNOS and Galileo on economic and 
social benefits for the European  Union including externalities. 
The structure of the MMFP is presented on Figure 10 . 
 
Figure 10: Structure of the MMFP 
 
EN 89   EN These two models in combina tion with additional analysis were used for calculating the 
indirect benefits summar ised in chapter 6.1.1.2:  
The total indirect benefits are equal to the su m of benefits generated in three sources:  
• downstream market growth,  
• upstream market and spill over, 
• public utility (also referred to as social a nd environmental benefits  or public benefits). 
The calculation methodology of the benefits will  be explained in the following sections. 
Indirect economic benefits 
Downstream market growth  for the EU-27 region is calcul ated by using the Market Model 
of the MMFP. Applying the bottom-up approach, market revenues are calculated for each 
GNSS application and aggregated to the sector le vel and finally to the GNSS market level. In 
the Market Model applications from the fo llowing 4 sectors are taken into account: LBS, 
road, aviation and agriculture.  The GNSS revenues are the product of shipment s of devices and their price. Although the 
model is device-driven, additional services (e.g. sales of maps for TomTom) have been included in the calculation. 
The downstream market growth represents the additional growth of the GNSS applications 
market that is due directly to the introducti on of Galileo. It is based on assumption that the 
introduction of new technologies has a positive impact on the development of user applications based on these technologies, lead ing to faster replacement and increase in sales 
of devices (e.g. introduction of 3G boosted the mobile phones market).  
It means that a certain share of  calculated total GNSS revenues wi ll be attributed to Galileo. 
This share is called Galileo delta in MMFP. Th e deltas are defined based on value added of 
EGNOS/Galileo in the following dimensions (cha racteristics of GNSS network): accuracy, 
availability, indoor penetration, authentic ation, integrity and EU independence. 
The model is based on validated input data  and assumptions, both global (equal for all 
sectors) and sector-specific (see Fi gure 11 and Figure 12 for details).  
 
MM segment   Assumption   Value   Source   
Smartphones  Share of full device price attributable to LBS  1%  Helios validation  
Smartphones  Share of LBS data revenue in total smartphone data 
revenue  2.5%  Helios validation  
Smartphones  Monthly data ARPU for Europe in 2011  €10  Helios validation  
Smartphones  Peak monthly data ARPU for Europe (in 2020) €20  Helios validation  
Smartphones  Monthly data ARPU for N. America in 2011  €5  Helios validation  
Smartphones  Peak monthly data ARPU for N. America (in 2020) €15  Helios validation  
Smartphones  Monthly data ARPU for ROW in 2011  €1  Helios validation  
Smartphones  Peak monthly data ARPU for ROW (in 2020) €5  Helios validation  
People tracking devices  Addressable market percentage  30%  LE analysis 
People tracking devices  GNSS peak stock penetration  50%  LE analysis 
People tracking devices  Year GNSS peak stock penetration is reached  2035  LE analysis 
People tracking devices  Galileo peak stock penetration  40%  LE analysis  
People tracking devices Year Galileo peak stock penetration is reached  2040  LE analysis  
People tracking devices  EGNOS peak stock penetration  40%  LE analysis  
People tracking devices  Lifetime of a pe ople tracking device  5 years  LE analysis  
Figure 11:  List of sector-specific assumptions u sed in MMFP (example of LBS sector). referred to as economic benefits 
 
EN 90   EN  
Global Assumptions (MMFP)  
Assumption name   Units   Value   Source   
Average EU VAT (%)  %  19.50%  Eurostat  
Average EU Corporation tax rate (%)  %  23.20%  Eurostat  
Average '05-'07 earning/revenue ratio 
(%): Manufacturer of communication 
equipment - services  %  12.7%  Amadeus database  
Average '05-'07 earning/revenue ratio 
(%): Telecommunications 
companies– devices  %  14.1%  Amadeus database  
Average EU 27 inflation rate  %  1.6%  Eurostat  
$ to € Exchange rate conversion 
factor  #.##  0.82  OANDA  
Price elasticity to offer reduction 
(price elasticity to a decrease in oil 
production)  #.##  5.00  VVA estimate on EIA data  
Statistical value of a life (mean)  €m  2.0  European Commission (2009) PART III: 
ANNEXES TO IMPACT 
ASSESSMENT GUIDELINES, http://ec.europa.eu/governance/impact/co
mmission_guidelines/docs/iag_2009_ann
ex_en.pdf .  
Value of CO 2 (per tonne)  €/tCO 2  22.50  ICE ECX EUA Futures (Dec 2020), 
European Climate Exchange 
www.ecx.eu , supported by Committee on 
Climate Change (2009, p. 68) Meeting 
Carbon Budgets – the need for a step 
change , http://www.official-
documents.gov.uk/document/other/97899
99100076/9789999100076.pdf .  
Average hourly salary (All NACE 
activities (except agriculture; fishing; 
activities of households and extra-
territorial organizations))  €/hour  17.71 
(2006, to 
be 
indexed)  Eurostat – Hourly la bour costs - Nace 
Rev. 1.1 ( lc_an_costh ): 
http://epp.eurostat.ec.europa.eu/portal/pa
ge/portal/statistics/search_database#   
Value of leisure time 
Proposed amendment from VVA 
estimate of 50% of salary.   €/hour  33% of 
salary  World Bank (2005) Valuation of Time 
Savings (TRN-15).  
Real Economic Growth (Percentage change in Trend GDP, constant 
prices):  
- Europe  - North America  
- Rest of World  %     
   
1.17%  
1.72%  6.31%  EC DG-ECFIN AMECO 
http://ec.europa.eu/ economy_finance/ame
co/user ; IMF World Economic Outlook 
Database, http://www.imf.org/ext ernal/pubs/ft/weo/
2010/02/weodata/index.aspx .  
Figure 12: List of global assumptions used in MMFP 
 
Upstream market growth & spill over  for the EU-27 region is based on:  
• Gross Value Add (GVA) of the investments into space infrastr ucture within the 
Galileo programme: the GVA is estimated to be 60% of the total costs (i.e. deployment and operational costs), excluding costs of imports and raw materials. 
These investments result into an increase in disposable income that flows back into the 
economy and contributes to EU GDP;  
 
EN 91   EN • Spill-over effects of R&D investments are calculated with the assumption that new 
technologies developed for space projects are often used in terrestrial applications 
increasing the size of the non-space ec onomy. The average R&D spending in UK 
space sector is 8% of turnover according to Oxford Economics. According to the same source, 1 EUR spent on R&D in space leads to  a sustainable increase in GDP of 0.70 
EUR. The model applies the same or lower ratios to the Galileo project (5% and 0.7), 
assuming that most of the EUR 0.8bn R&D sp ending occurs relativ ely early in the 
programme.  
Calculation of upstream market growth and spil l over is a separate analysis, not included in 
MMFP. 
Indirect social and environmental benefits 
The public benefits  for EU-27 region were calculated ba sed on the Public Utility Model of 
MMFP.  The GNSS benefits are externalities that  are directly or indirectly generated by 
GNSS applications, like: 
o benefits for public institu tions (VAT, corporate tax) 
o benefits for users (time sa vings, fertilizer reduction) 
o benefits for society (CO2 reduction, noise reduction) 
Those benefits have been firs tly calculated for the networ k of all available GNSSs and 
secondly a certain share of total GNSS bene fits was attributed to EGNOS/Galileo. The 
percentage share of benefits (EGNOS/Galileo delta) was defined based on value added of 
EGNOS/Galileo in the following dimensions: accu racy, availability, indoor penetration, 
authentication, integrity and EU independence. 
The calculation of public benefits  is robust and focuses on exte rnalities with clear link to 
GNSS use. Figure 13  presents examples of public benef its defined for road transport. An 
example of calculation of time savings in road (benefit of highest  value in MMFP) is 
presented on Figure 14 . 
 
 GNSS applications defined for road transport  
Public benefits   Navigation RUC PPUI ADAS eCall 
Benefits for users       
Travel time reduction 9     
Fuel consumption reduction 9     
Social benefits/externalities       
Air pollution reduction 9     
Climate change (less Co2) 9     
Severity decrease in injuries/accidents    9 9 
Congestion reduction from avoided accidents    9  
Saved lives    9 9 
 
EN 92   EN New jobs 9 9 9 9 9 
Benefits for public institutions       
∆ VAT 9 9 9 9 9 
∆ Corporation tax 9 9 9 9 9 
Figure 13: Mapping of public benefits with  GNSS applications in road transport 
 
 
 
Figure 14: Example of calculation of public benefits: time savings in road transport. 
The categories of public benefits have been defi ned with sectoral expe rts and the calculation 
was based on validated assumptions  (see Figure 6 for more details). 
PUM benefit   Assumption   Value   Source   
Fuel consumption & Air 
pollution & CO2 emissions % of km driven in urban areas 10% VVA 
Fuel consumption & Air 
pollution & CO2 emissions % of urban kilometres travelled by private cars 75% VVA 
Fuel consumption & Air 
pollution & CO2 emissions % modal shift from cars to public transport 2% VVA 
Air pollution Air pollution (€/1000 Vehicle-Km) 13 VVA 
Time savings for pedestrians Ti me spent walking per person per day (hours) 0.30 LE analysis 
Time savings for pedestrians % of walking in urban areas 50% LE analysis 
Time savings for pedestrians % of wa lking where smartphone is used for 
navigation 0.5% LE analysis 
Value of lives saved Fatalities reduced to  severe injuries (%) 0.1% LE analysis 
Value of lives saved Avoided deaths (%) 0.1% LE analysis 
All  Share of smartphones which are 2nd devices  5% by 
2021  LE analysis 
Figure 15: List of assumptions used in Pub lic Utility Model (example of LBS sector). 
 
EN 93   EN Benefits such as lives saved and water savi ngs are non-monetised public  benefits and were 
estimated only for policy option 1 – baseline option. The results of non-monetised analysis 
were not used as an argument in assessi ng the impact of different policy options.  
Non-monetized benefits: 
• 6,000 jobs (Net jobs creation from 2015-2027) 
• 8,500 saved lives (Cum ulative until 2027) 
• 2,000,000 lives improved (Average from 2015-2027) 
• 1,2 trillion m³ of water sa ved (Cumulative until 2027) 
Public benefits in different launch scenarios 
The comparison between five different policy op tions for problem 1 presented in Table 4 was 
done by preparing five different scenarios in the MMFP. The simu lation of benefits was based 
on the following steps: 
• Calculation of the Galileo delta (percentage used to define the Galileo 
share of market revenues  and public benefits, see sections above for more 
details) 
• Variation of this delta taking into account Galileo deployment scenarios 
and other GNSSs 
The Galileo delta estimation (usually 5-10% of  market and public utility depending on the 
segment) is based on the following assumptions: 
• GPS characteristics are ba sed on GPS today (2009) 
• Galileo is the 2nd GNSS in use after GPS 
• Galileo is deployed according to curren t baseline in terms of features 
The Galileo delta is then corrected and simulated over time taking into account GPS 
modernisation, additional GN SS being launched (Compass and Glonass), delays in the 
deployment of Galileo and changes in the Galileo baseline (e.g., number of satellites, services 
available). 
GNSSs are compared on the following 6 features : Accuracy, Availabil ity, Integrity, Signal 
tracking and indoor penetration, Au thentication and EU independen ce. For each user segment, 
the features are weighted accord ing to their importance. For a given year, Galileo is compared 
on each feature to the best ava ilable GNSS. This comparison takes into account the number of 
deployed satellites and the Galile o services available. In case Ga lileo is clearly superior to 
GPS and other GNSS it takes the full value of the improvement over GPS (as modelled by the static Galileo delta). In case Galileo is provi ding roughly the same benefits as another GNSS 
or as the modernized GPS on a specific feature,  this value is shared between the GNSS (e.g., 
divided by 3 in case Galileo, GPSIII and Compass provide the same improvements). In case Galileo does not improve significantly over current GPS, the delta is equal to 0. 
 
 
EN 94   EN  ANNEX VII  – PERFORMANCE MAPS  
To give an example, below are the performance maps for Galileo horizon tal accuracy for four 
options. Figure 4 represents option (4) where th e identified worst user  locations correspond to 
European latitudes (lighter/red spots), Figure 5 represents option (3), where most of the 
European latitudes are covered with a signal of good accuracy. In Figure 6 representing both 
options (1) and (2) the whole surf ace of the planet is covered by an excellent accuracy (all in 
blue). 
Figure 16: Performance map for option (4)  
Galileo horizontal accuracy [m] Figure 17: Performance map for option (3)  
Galileo horizontal accuracy [m]  
 
Figure 18: Performance map for options (1)  
and (2) Galileo horizontal accuracy [m]  
  
 
 
EN 95   EN ANNEX VIII  – GALILEO SOL SERVICE RE -PROFILING  
The original Galileo SoL service has been conceived with the objective to offer a stand alone 
service to world-wide users and based on a proprietary solution developed for Galileo. This approach has triggered significant concerns with the SoL user communities that have clearly indicated their intent to adopt future solu tions based on the combined use of satellite 
constellations in order to increase overall serv ice performance and robustness. This message 
has been constant over the last few year s and the trends observed in the on-going 
standardisation processes in different applicatio n domains confirm that this approach is the 
one pursued for the future GNSS equipments. 
It is therefore proposed to adopt a revised strategy more in line with the user expectations and 
that favour integration with other existing GNSS systems. This decision calls for the adoption 
of common standards with other international GNSS service prov iders and also dictates to 
use, to the maximum extent possible, signals over common frequency bands. 
A replacement SoL concept for Galileo is therefore not yet defined and should be the result of 
a collaborative process at international level. One of the most promising approaches identified so far would be a revised SoL concept base d on an apportionment of the error detection 
capability between the GNSS provider and the us er receiver. This would enable to reduce 
significantly the implementation burden for th e Galileo programme wh ile still offering 
interesting operational benefits for the user  communities when using more than one 
constellation. Under this scenario, a reduced leve l of performance may also be available when 
using Galileo independently but it is unlikely to be sufficient to serve the most demanding 
user communities. The Commission has launched a dedicated work-plan to  support a decision 
on the Galileo SoL re-profiling in 2013.  
A SoL working group has been set-up by the Commission with experts nominated by Member 
States in order to help defining the new mi ssion targets for the re-profiled Galileo SoL 
service. This working group is expected to  provide its conclusions and recommendations 
towards the beginning of 2013. The programme object ives with regard to Galileo SoL would 
then be documented in a revised version of the High Level Docu ment (HLD) and Mission 
Requirement Document (MRD). 
Regarding the ground infrastructure, the main di fferences between B.2 and B.3 versions, the 
latest one supporting a standalone serv ice could be summarised as follows: 
– more ground stations to be deployed over the whole globe; 
– more redundancy in the communication network; 
– tighter specifications on the different el ements of the ground segment in order to 
meet a very stringent time to alert requirement; 
– potentially higher levels  of software quality; 
– more administrative burden to perfor m the qualification of the system.  
 
 
 
 
EN 96   EN