COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT
Date: 2011-11-30
Institutions: European Commission
Subjects: EU financing, EU programme, European Space Agency, public contract, satellite navigation

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 European satellite navigation programmes (2014 – 2020)  

{COM(2011) 814 final} 
{SEC(2011) 1447 final} 

 
 
 
 
  
 
 
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TABLE OF CONTENTS 

Definitions.................................................................................................................................. 7 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

Procedural issues and consultation of interested parties .............................................. 9 

Identification ................................................................................................................ 9 

Organisation and timing............................................................................................... 9 

Consultation and expertise ........................................................................................... 9 

Scrutiny by the Commission Impact Assessment Board ........................................... 11 

Context ....................................................................................................................... 12 

Europe needs a global navigation system: rationale and added value ....................... 12 

Governance, financing and legal framework ............................................................. 16 

2.2.1.  Galileo: Objectives, infrastructure and implementation phases................................. 18 

2.2.2.  EGNOS: Objectives, infrastructure and implementation phases ............................... 19 

3. 

3.1. 

3.2. 

Problem definition...................................................................................................... 20 

Challenges .................................................................................................................. 20 

Evaluations of the GNSS programmes ...................................................................... 20 

3.2.1.  Galileo 

3.2.2.  EGNOS 

21 

23 

3.3. 

The problem that requires action................................................................................ 23 

3.4.  Who is affected, in what ways and to what extent? ................................................... 24 

3.5. 

3.6. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

Foreseen evolution of the problem............................................................................. 25 

EU right to act ............................................................................................................ 26 

Objectives................................................................................................................... 26 

General policy objectives........................................................................................... 26 

Specific policy objectives .......................................................................................... 27 

Consistency with other policies and objectives ......................................................... 28 

Policy options............................................................................................................. 29 

Policy options for problem 1: Way forward on further implementation and 
exploitation of the European GNSS programmes...................................................... 29 

5.1.1.  Galileo 

5.1.2.  EGNOS 

29 

31 

5.2. 

Policy options for problem 2: Governance scheme for the exploitation of both 
Galileo and EGNOS systems ..................................................................................... 31 

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5.2.1. 

Identification of functions to be performed during exploitation phase...................... 32 

5.2.2.  Organisation of the programme management functions ............................................ 33 

5.2.3.  Political supervision ................................................................................................... 34 

5.2.4.  Options for programme management......................................................................... 34 

5.3. 

Summary .................................................................................................................... 35 

6. 

6.1. 

Analysis of impacts .................................................................................................... 37 

Analysis of impacts for problem 1: Way 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: Governance 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. 

7.1. 

7.2. 

8. 

8.1. 

8.2. 

9. 

Comparing the options ............................................................................................... 49 

Comparing the options for problem 1: Way forward on further implementation and 
exploitation of the European GNSS programmes...................................................... 49 

Comparing the options for problem 2: Governance scheme for the exploitation of 
both Galileo and EGNOS systems ............................................................................. 53 

Monitoring and evaluation ......................................................................................... 55 

Indicators.................................................................................................................... 55 

Monitoring and evaluation ......................................................................................... 55 

Annexes...................................................................................................................... 57 

Annex I - Overview of the Mid-term review of the European satellite radio navigation 

programmes (COM(2011) 5 final) ............................................................................. 58 

Annex II - Overview of the stakeholder consultations............................................................. 59 

Annex III - Studies and articles................................................................................................ 61 

Annex IV – Sector-specific impacts......................................................................................... 62 

Annex V - EU publications on GNSS ...................................................................................... 81 

Annex VI: GNSS Market Monitoring and Forecasting Tool: Methodology ........................... 88 

Annex VII – Performance maps............................................................................................... 94 

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Annex VIII – Galileo SoL service re-profiling ........................................................................ 95 

TABLE OF FIGURES 

Figure 1: Overall schedule of the implementation of the Galileo programme......................... 21 

Figure 2: Functions of political supervision 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  identified  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 benefits: 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 services per infrastructure options ..................................................... 38 

Table 4: EGNSS indirect benefits per option – 2014-2034 ..................................................... 40 

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Table 5: EGNSS potential direct revenues per option ............................................................. 42 

Table 6: European GNSS programmes costs per option 2014-2034 ....................................... 43 

Table 7: Summary of the competitiveness impact ................................................................... 46 

Table 8: Compliance with general policy objectives ............................................................... 49 

Table 9: Cost-benefit analysis 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 

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DEFINITIONS 

Commission 

European Commission 

Council 

Council of the European Union 

CS 

DG  

E0 

E1 

EASA 

EDAS 

EGNOS 

EGNSS 

ESA 

Commercial Service 

Directorate-General of the European Commission 

Entity responsible for political supervision 

Single entity responsible for programme management 

European Aviation Safety Agency 

EGNOS Data Access Service 

European Geostationary Navigation Overlay Service 

European Global Navigation Satellite System 

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 

GDP 

GJU 

GLONASS 

GMES 

GNSS 

GNSS Committee 

GNSS Regulation 

Full Operational Capability (of the Galileo system) 

Gross Domestic Product 

Galileo Joint Undertaking  

Global'naya Navigatsionnaya Sputnikovaya Sistema: a radio-
based  satellite  navigation  system  operated  by  the  Russian 
government 

Global Monitoring for Environment and Security 

Global Navigation Satellite System 

European  GNSS  Programmes  Committee  established  by 
Article 19 of the Regulation (EC) No. 683/2008  

Regulation  (EC)  No.  683/2008  of  the  European  Parliament 
and  the  Council  on  the  further  implementation  of  the 
European  satellite  navigation  programmes  (EGNOS  and 
Galileo) 

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GPS 

GSA 

ICAO 

IGO 

IOC 

IOV 

ITU 

ITU 

Global Positioning Service: a radio-based satellite navigation 
system operated by the US government 

European GNSS Agency 

International Civil Aviation Organisation 

Inter-governmental organisation 

Initial Operational Capability (of the Galileo system) 

In-Orbit Validation 

International Telecommunications Union  

International Telecommunication Union 

Member States 

Member States of the European Union 

MFF 

MRD 

OS  

PND 

PRS 

SAR 

SBAS 

SoL 

Multi-annual financial framework 

Mission Requirements Document 

Open Service 

Personal Navigation Device 

Public Regulated Service 

Search and Rescue Service 

Satellite-Based Augmentation System 

Safety of Life Service 

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1. 

1.1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  

Identification  

Lead DG:  

Enterprise and Industry 

Other involved DGs: 

Agenda Planning/WP Reference:  

2011/ENTR/003 

1.2. 

Organisation and timing 

This impact assessment accompanies a legislative proposal for a Regulation of the European 
Parliament  and  of  the  Council  on  the  further  implementation  of  the  European  satellite 
navigation programmes (2014 – 2020). It follows the adoption of the mid-term review of the 
European  satellite  radio  navigation  programmes1  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 consisting 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 agreed 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 variety 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 with 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  and  representatives  of  the  GNSS  programme 
committee. 

Stakeholders were consulted on technical 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.europa.eu/code/en/en-

390600.htm   

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•  The  Eurobarometer  survey  in  June  20073  which    questioned  around  26  000  citizens  all 
over the European Union on a range of issues linked to Galileo 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,  including  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 impact to major satellite based services. 

Key findings 

•  The majority of respondents to the two Eurobarometer surveys expressed their support to  
continue  developing  an  independent  satellite  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 general 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  representatives  of  public  administrations  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  Life  service  (SoL)  concept:  some  key  Safety  of  Life  service 
features such as the limited level of interoperability with other GNSS systems and existing 
ICAO  and  Eurocontrol  standards7  are  perceived  as  hindering  a  wide  adoption  by  key 
stakeholders in the civil aviation. This strong position adopted by this community calls 
for a redesign of the Galileo SoL concept; 

•  EGNOS safety-of-life service having been declared operational, 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  communities8,  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 vulnerabilities (2010), UK Royal Academy of Engineering 
7  Eurocontrol  Policy  on  GNSS  for  Navigation  Applications  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 

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future evolution of the European GNSS programmes after 20139 and a number of studies and 
articles on dependency on GPS10.  

Ex-post evaluations 

This  impact  assessment  also  builds  on  the  two  successive  evaluations:  firstly,  on  the 
assessment of the Galileo programme's development phase until 2008 carried out by the Court 
of  Auditors11  and  secondly,  on  the  evaluation  of  both  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 assessment which accompanied the Action Plan 
on  global  navigation  satellite  system  applications.  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 regimes 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  recommendations  in  strengthening  the  link  between  the 
objectives  and  problem  drivers, making better use of  the  evaluation findings, demonstrating 
better  the  EU  added  value,  better  explaining  the  scope  of  the  options  and  improving  the 
description of the methodologies used for assessing the impacts. 

In the light of the latter, the 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 Social Committee and the Committee of the Regions 
-  Action  Plan  on  Global  Navigation  Satellite  System  (GNSS)  Applications  SEC(2010)716 
SEC(2010)717 

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2. 

CONTEXT 

2.1. 

Europe needs a global navigation system: rationale and added value 

Rationale 

Knowledge  of  highly  reliable  and  accurate  information  on  position,  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 System) 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 command and control. Civil applications are steadily 
increasing,  especially  for  personal  use  in  vehicles  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 spreads15, the prospect to revert to 
traditional  positioning  and  timing  methods  becomes  more  and  more  difficult.  The 
implications16 of a disruption of satellite navigation services are even greater, jeopardising not 
only the efficient running of transport but also human safety17.  

Several  countries  have  become  aware  of  their  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 Navigatsionnaya Sputnikovaya Sistema) and the 
European Galileo programme. The Chinese COMPASS is expected to be completed between 
2015 and 202018.  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 Assistant 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 vulnerabilities (2010), UK Royal Academy of Engineering, 

http://www.raeng.org.uk/news/publications/list/reports/Global_Navigation_Systems.pdf 

17 Why Europe needs Galileo, 2010, European Space Agency 
18  "The  less  known,  but  crucial  elements  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 Navigation 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  inclined  geosynchronous  orbit 
(IGSO)  satellites  operating  over  Japan  and  surrounding  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) 

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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 provided 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  guarantee  to  maintain  an  uninterrupted  service. 
Consequently, the European economy is increasingly relying on a military infrastructure not 
controlled  by  Europe  and  not  primarily  designed  to  serve  European  economic  purposes. 
Furthermore,  these  systems  experience  a  poor  availability  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  global satellite  navigation  system22.  Long  before  the  wide 
dissemination of the Personal Navigation Devices (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  satellite  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  particular  with  the  US  GPS,  would  need  to  be 
pursued;23 

•  To  reinforce  the  resilience  of  the  European  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  exploiting  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  assessment,  accompanying  document  to  the  Communication  of  the 
European  Commission  on  Action  Plan  on  Global  Navigation  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 Washington 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 impact 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/archive/ra/topics/research/topics/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, provision and use of Galileo and GPS satellite-based navigation 

systems and related applications 

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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 securing important macro-economic benefits for the 
European  Union,  catalysing  the  development  of  new  services  and  products  based  on  GNSS 
and generating technological spin-offs beneficial for research, development and innovation24.   
The European satellite navigation policy25 is based on these goals and aims at providing the 
EU  with  two  satellite  navigation  systems,  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 positioning 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 Maritime navigation services, 
over the European area27. 

•  The second satellite navigation system established under the Galileo programme, will be 
the first global satellite navigation and positioning infrastructure 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  combined  GPS-Galileo  use  (compared  to  GPS  by 
itself)  the  higher  number  of  satellites  available  to  the  user  will  offer  higher  precision. 
From most locations, six to eight Galileo satellites 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  augmentation  systems  (SBAS)  augment 
core satellite constellations by providing ranging, integrity and correction information, which increase 
accuracy,  reliability,  and  availability  of  GNSS  positioning.  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  Augmentation  System  (MSAS),  Japan  (source:  Inside 
GNSS, http://www.insidegnss.com/aboutregional). 

27 The European area for the EGNOS system is the area of 44 members states of the European Civil Aviation 

Conference.  

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2.  Better  availability  of  the  signals:  The  high  number  of  satellites  will  also  improve  the 
availability  of  the  signals  in  high-rise  cities,  where  buildings  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  system  (for  a  technical  details  see  chapter  6.1.1.1).  However, 
interoperability of this system with other existing 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  interoperability  and  multiplication  of  the  satellite 
navigation  systems  with  increased  reliability  and  precision,  and  most  receivers  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 European Parliament over the past ten years28.  

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  downstream  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  the  need  for  a  timely  deployment  of  a 
competitive  and  independent  Galileo  constellation  and  acknowledges  the  substantial 
economic and social benefits for the European Union and its citizens" 

On 8 June 2011, the European Parliament adopted an own-initiative report30 in response to the 
mid-term review of the GNSS programmes31 in which it: 

−  "Emphasises  the  strategic  importance  of  space  policy  and  the  GNSS  programme  in  the 
drive to establish a genuine European industrial policy based on practical projects with 
tangible benefits for the public and for business[…]; 

−  Points  out  that  long-term  stability  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, 
Remek. 
Research 
http://www.europarl.europa.eu/oeil/FindByProcnum.do?lang=en&procnum=INI/2009/2226 

Rapporteur: 

Vladimír 

Energy. 

and 

31 Idem footnote 12 

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−  Considers  that  Galileo  and  EGNOS,  as  European  programmes  owned  by  the  EU  which 
address a public interest at EU level, should mainly be financed through the EU budget;  
believes  that  –  alongside  the  contribution  from  the  EU  budget  –  all  possible  sources  of 
financing should be investigated, including innovative forms of financing […]; 

−  Believes  that  the  long-term  governance  and  management  structure  of  GNSS  should 
address the division of tasks  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  the  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  authorities32,  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-Private-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  the  Commission  and  the  European  Space  Agency 
(ESA) to create a common management and funding platform for the Galileo programme. The 
Galileo  Joint  Undertaking  carried  out  concession  negotiations  with  a  consortium  of  private 
companies  to  establish  a  Public-Private  Partnership.  These  negotiations  did  not  succeed  in 
2007  as  a  result  of  unwillingness  of  the  private  sector  to  accept  the  most  important 
programme risks, namely design 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  GNSS  programmes.  The  European  Space  Agency 
carried  the  responsibility  over  the  management  and  implementation  of  the  GNSS 
programmes, with a combined funding of the EU and ESA of € 2.8 bn. 

In  November  2007  the  Council  reached  conclusions  on  the  future  development  of  Galileo, 
specifically  on  the  governance  and  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 involvement 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  their  different  expectations  intervened  mostly  in  the 
interest of their national industries. 
35 Regulation (EC) 1321/2004 

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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 the Galileo and EGNOS programmes with full EU funding. The 
Commission  signed  a  delegation  agreement  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  Commission  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 European Commission under the new governance 
scheme, the need for a separate authority to manage 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 strategic orientations to be pursued, prepares 
on  behalf  of  the  EU  functional  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 the governance of system security issues departs 
from this general scheme, as Council and Member States are directly involved 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 budget 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 operation of EGNOS (around 
€ 400 million). 

The  GNSS  Regulation  also  defines  the  objectives  of  the  Galileo  and  EGNOS  programmes, 
their  respective  infrastructure  and  their  development  phases  as  outlined  in  the  following 
sections. 

EU Budget proposal:  multiannual financial framework 2014-2020 

The  Commission  adopted  an  over-arching  proposal  for  the  next  multiannual  financial 
framework  for  the  EU  Budget  2014-202037  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  Commission  Staff  working  paper 
accompanying the budget proposal38. It is proposed that the ceiling 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 

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2.2.1.  Galileo: Objectives, infrastructure and implementation phases  

The  objective  of  the  Galileo  programme,  as  referred  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 requiring 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 interference or disruptions; 

the  Search  and  Rescue  service  (SAR),  for  the  international  cooperative  effort  on  the 
humanitarian  search  and  rescue,  defined  in  cooperation  with  the  International  Satellite 
System  for  Search  and  Rescue  organisation  (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  Commission,  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 consistent with the Galileo Mission High Level 
Definition  document  (HLD)41  which  presents  the  main  characteristics  of  the  Galileo 
programme and describes the services and performances offered by the Galileo system. 

In order to deliver the five services, Galileo will consist of the following infrastructure: 

•  Space infrastructure consisting of a constellation of 30 satellites 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 distributed sensor stations and the generation of the 
navigation messages.  

Building up the infrastructure and provision 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_transport/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  

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•  The  development  phase,  aiming  at  reaching  In  Orbit  Validation  (IOV)  of  the  system: 
construction and launching of the first four satellites 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  ground  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, infrastructure 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 area43, 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 several 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  operational  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  support  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  integrity  monitoring  stations 
(RIMS) mainly in Europe, 4 control and processing centres to process the RIMS data, to 
generate corrections for the navigation data and to provide information on the integrity of 
the  system,  and  6  navigation  land  earth  stations  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 Document - Open Service:  

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/brochures-leaflets/egnos-os-sdd_en.pdf 

45 The EGNOS MRD is an internal Commission document. 

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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 requirements and such level of technical details; 

•  Magnitude  and  technical  complexity:  these  programmes  are  not  based  on  off-the-shelf 
technology but on the technology specifically developed for a concrete purpose, requiring 
heavy  upfront  investment  and  continuous  maintenance  and  technological  updates  of  the 
design; 

•  Long-term commitment:  building  space  systems  requires  a  long-term  commitment  and 
adequate  funding  to  support  the  implementation  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  aerospace  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  -  Galileo  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 narrow as other competing Russian (GLONASS) 
and  Chinese  (COMPASS)  GNSS  are  building  up  progressively  their  full  operational 
capability. 

Should  these  challenges  not  be  tackled  appropriately,  the  EU  would  fail  to  successfully 
deliver the economic and social benefits expected from the European GNSS Programmes. 

3.2. 

Evaluations of the GNSS programmes 

The  Court  of  Auditors  published  a  report46  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 Commission 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  programmes  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 installations are ready for the launch of the first 
operational satellites in 2011. The report clearly 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 

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•  Cost  overruns  resulting  in  a  need  for  additional  resources  to  complete  the  Galileo 

infrastructure and delays in delivering this infrastructure 

•  Undefined funding and governance for the exploitation 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 short-term a need to provide the first Galileo 
services in 2014-2015 and in a long-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  phase  would  be  completed  by  2009,  the  deployment  of  the 
infrastructure by 2013 and the exploitation phase would start as of 2014-2015.  

The development phase suffered a delay of three years and is now expected to be completed 
in 2012. Consequently, the deployment phase is expected to reach initial operational capacity 
(IOC) and provide early services in 2014-2015 and full operational capacity (FOC) in 2019 as 
outlined below in Figure 1.  

Figure 1: Overall schedule of the implementation of the Galileo programme 

•  The Development and Validation Phase started in 2002 and should have originally run 
until  2005.  Two  experimental  satellites  (GIOVE-A,  GIOVE-B)  were  launched  which 
fulfilled  the  primary  task  of  bringing  into  use  the  frequency  filings  according  to  the 
provisions of the International Telecommunications Union (ITU) 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 operational capability (FOC) in 2019. 

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•  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 difficulties48 were encountered: 

•  The transfer of project supervision meant the need to renegotiate some contracts and the 

requirements associated with putting the new arrangements in place;49 

•  An  unforeseen  second  experimental  satellite  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 setting up contracts for the deployment phase; 
•  A number of technical risks, stemming from the technical complexity of the programme 
and the lack of previous experience in similar projects, needed 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  overruns  amounting  to  EUR  560  million  for  the  ESA 
development phase. At the request of Member States, 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 budget 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 launch services worldwide led to an extra cost of some EUR 500 

million for the deployment phase; 

•  A lack of competitive bids due to monopoly situation 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  Galileo  and  EGNOS  infrastructures.  Contracts 
are in place that provide for price stability for some time to come. 

-  Achieving greater clarity on the 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  

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-  More realistically assessing the various risk factors that can affect the programmes as 
previous cost estimations for the GNSS programmes 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 overruns, the 2007-2013 budget for the European GNSS 
programmes allowed for building only 14 satellites (out of the 30 envisaged) 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 also 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 and putting pressure on industry for an improved 
deal.  

It needs to be emphasised that the problem drivers cannot be completely tackled as existence 
of  uncertainties  and  risk  in  programme  management  is  an  inherent  feature  of  complex 
programme.  Therefore,  despite  various  mitigation  measures  can  be  taken,  it  would  be 
inappropriate to suggest that these will 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 2nd 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 the 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, the 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  operational  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  summarised  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  Galileo  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. 

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Therefore,  the  first  problem  will  address  what  are  the  options  for  deploying  the 
Galileo  system  after  2013  in  terms  of  services  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  Commission'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 financing 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  Galileo  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  should  provide  continuity, 
consistency  and  credibility  towards  third  parties.  Regarding  the  Galileo  exploitation 
phase, new governance arrangements should be considered and gradually adapt to the 
needs and experiences arising from the provision of the first services. 

As  the  exploitation  phase  of  the  EGNOS  programme  is  ongoing,  the  long-term 
governance framework needs to be set-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  problem  2  needs  to  be  delimited.  The  aim  of  the 
analysis  is  neither  to  decide  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  programmes  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 properly deliver any service.  

51 COM(2011) 500 of 29.6.2011 "A Budget for Europe 2020"  

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As outlined in chapter 2.1, this would affect the EU citizens, industry and public authorities at 
various levels: 

•  The  growth  of  the  European  navigation  applications  industry  depends  on  the  very 
existence  of  a  European  GNSS.  In  the  absence  of  a  European  GNSS,  this  whole  new 
sector will fail to emerge; 

•  Furthermore, several economic sectors 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  synchronise  telecommunications  networks  and 
increasingly power management systems, especially in the frame of the development 
of smart grids. 

Of  course,  these  industries  do  not  rely  today  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 accelerated the adoption of GPS based devices in 
all aspects of EU citizens' daily life. Therefore, 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  technical  failure  would  have  a  major  impact  on  the  European 
society. 

This reliance is not limited to private sector infrastructures 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  already  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 objectives of the GNSS Regulation and the progress on 
the Galileo programme deployment, the Initial Operation 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  operators  of  Galileo  and  EGNOS  will  have  to 
discontinue  their  activities  after  mid-2014.  This  means  that  the  18  launched  satellites  of 
Galileo  will  gradually  move  away  from  their  orbits  and  will  be  lost  some  weeks  after.  The 
ground infrastructure consisting mainly of electronic equipment  that will not be  operated or 
maintained will be unusable after a few months. System suppliers will stop maintaining their 
technical capabilities in the field of satellite navigation. 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,  industries  and  international  partners.  The  economic 
potential  that  could  have  been  created  by  the  systems,  which  is  estimated  to  be  around  134  
billion EUR over the 2014-2034 period52 including downstream, upstream market and public 

52 This amount is detailed in chapter 6.1 Analysis of impacts for problem 1:  

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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 manufacturers. For most receivers 
two reference constellations are sufficient to ensure adequate service quality. Consequently,, 
Galileo  could  definitively  loose  ground  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  potential  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 mentioned 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  implementation  of  the  European  satellite 
navigation programmes (EGNOS and Galileo)55. 

The  establishment  of  satellite  navigation  systems  cannot  be  sufficiently  achieved  by  the 
Member  States  as  it  exceeds  the  financial  and  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.  Therefore,  the  governance  is  de  facto  of 
European nature.  

4. 

OBJECTIVES 

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 provide 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 applications 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 

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•  Maximise  socio-economic  benefits  for  Europe  relying  on  more  accurate,  available  and 
robust  signal  by  exploiting  the  new  opportunities  generated  by  high-precision  satellite 
navigation to a much fuller extent than currently possible  

•  Build Europe's technical capability to develop, deploy and operate complex large-scale  

infrastructures  

These political objectives were the basis for defining the European satellite navigation policy 
in  the  GNSS  Regulation,  which  aims  at  providing  the  EU  with  two  satellite  navigation 
systems established under the EGNOS and Galileo programmes: 

•  The  aim  of  the  Galileo  programme  is  to  establish  the  first  global  satellite  navigation, 
positioning  and  timing  infrastructure  specifically  designed  for  civilian  purposes.  The 
system  established  under  the  Galileo  programme  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  improve  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  further  implementation  and  exploitation  of  the 
European GNSS programmes during the next 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 the baseline for comparison). 

(1.b)  To ensure that the policy options for implementation and exploitation of the European 

GNSS programmes are on-target costs and on-target date delivery.  

(2) 

To  define  a  long-term,  stable,  sustainable  governance  scheme  for  the  exploitation  of 
both Galileo and EGNOS systems that should address and fulfil at best the following 
objectives: 

1. Feasibility 

2. Fast decision making 

3. Robustness 

The  legal  complexity  of  the  initial  set-up  should  be  minimised  and 
allow  the  exploitation  model  to be  up and  running at  the  beginning  of 
the exploitation phase 

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 

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 

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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  (fairness  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 were 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 various options for governance.  

4.3. 

Consistency with other policies and objectives 

The  Space  Policy  Communication  of  the  European  Union  identified  Galileo,  EGNOS  and 
GMES59  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 developing innovative ways of exploiting satellite 
navigation,  boosting  economic  activity  in  the  market  further  downstream,  creating  new 
business  opportunities,  facilitating  the  provision  of  humanitarian  aid  and  enhancing  the 
wellbeing of Europe's citizens (e.g. by making transport safer, increasing civil protection and 
developing social services for the elderly and the disabled). The benefits of these programmes 
for the EU cut across all sectors of the economy, 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 sustainable 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  programmes  are  thus  instruments  essential  to  the 
transport development policy. 

Concerning  the  European  Transport  Policy,  specifically  the  GNSS  programmes  are  major 
priority  projects  of  the  trans-European  transport  networks  implementation  which  the 
European Union is supporting64. They contribute to this development with for instance their 
potential for traffic management and information 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 Regulation 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 
security. 

environment 

capacity 

and 

for 

operational 
observation 
Earth 
http://ec.europa.eu/gmes/index_en.htm  

60  Communication  from  the  Commission  COM(2011)152  of  4  April  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’   

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as  an  independent  radio  navigation  programme  used  for  highly  accurate  and  reliable 
positioning. 

In  addition,  also  as  part  of  the  European  Transport  Policy,  an  objective  of  the  European 
Commission  is  to  create  a  European  Electronic  Tolling  Service  (EETS).  It  should  start 
offering services by 2012. Satellite navigation can become the preferred technology to realise 
a  unique  Europe-wide  tolling  service.  The  EU’s  Interoperability  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  expected  to  contribute  to  law 
enforcement in various sectors. For instance, concerning 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. 

POLICY OPTIONS  

The implementation of the programmes as defined in the GNSS Regulation which defines the 
European satellite navigation policy and lays down 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  forward  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  Operational  Capability  (IOC)  foreseen  in  2014-2015,  the  18 
already  procured  satellites  should  be  deployed,  against  the  30  planned  for  the  Full 
Operation  Capability  (FOC).  Taking  into  account  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. 

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orbital  planes  and  that  they  have  to  be  launched  at  least  by  pair  per  orbital  plane, 
determined  by  the  capacity  of  the  Soyuz  and  Ariane  launchers,  three  theoretically  and 
technically possible final constellations 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 intermediate ground infrastructure70 (v2) 
will be deployed, allowing Galileo to provide navigation signals for OS, PRS and SAR. A 
subsequent  ground  infrastructure  (v3)  is  currently  planned  to  be  deployed  between  IOC 
and  FOC  to  enable  the  provision  of  the  stand-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 would generate significant delays and costs while 
the implementation has already started. 

Not all combinations of these two 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 accurate enough to provide a stand-alone SoL service. 
The  policy  options  to  be  considered  for  the  further  deployment  of  the  infrastructure  lead  to 
identify final FOC infrastructure. The policy options are outlined in Table 1. 

The  planning  of  reaching  IOC  in  2014-2015  and  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 the same amount of time regardless of the space 
and ground segment technical characteristics. 

Option 

(1) Baseline option 

Space 
segment 
(A.3)  

Table 1: Policy options for problem 1  
Ground 
segment  
(B.3)  

Services 

(2) Revised services 
option 

(A.3)  

(B.2) 

Services can be provided stand-alone as defined in the Galileo 
Mission Requirements Document 
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) related to the number of operational and spare satellites 
for each of the option is not presented. 
The 24 satellite constellation geometry can be optimised depending on the future evolution (24 satellites 
placed in the 27 initial slots or homogeneously distributed) 
The ground infrastructure comprises of over 50 ground stations around the world 

69  

70  

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(3) Reduced services 
option 

(A.2) 

(B.2) 

(4) Degraded 
services option 

(A.1) 

(B.1) 

(5) Termination of 
programme 

none 

none 

5.1.2.  EGNOS 

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.  
Services cannot be provided stand-alone, only in 
interoperability with GPS, not as defined in Galileo Mission 
Requirements Document. 
none 

The EGNOS system is already in operational phase, it requires the continuation 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  operational,  the  Commission  has  engaged  the  end-user 
communities in adopting the use of EGNOS. This adoption is leading end-users, in particular 
in  the  aviation  sector,  to  heavily  invest  in  adapting  their  systems  to  EGNOS:  For  instance, 
Eurocontrol is enabling the use of EGNOS by defining its concept of operations, supporting 
procedures  design,  conducting  a  generic  safety  assessment,  supporting  EASA  in  the 
development  of  airworthiness  and  operational  approval  material,  developing  an 
communication tool and managing pre-operational projects.72  

This  calls  for  a  long-term  commitment  of  the  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  completion  require  a  governance  structure  for  the 
exploitation of the GNSS programmes (Galileo 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 Document: The EGNOS SoL Service is available from the 2nd 

March 2011 
(http://ec.europa.eu/enterprise/policies/satnav/egnos/files/egnos-sol-sdd-v1.0_en.pdf) 

72 http://www.eurocontrol.int/press-releases/egnos-operational-aviation 

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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  levels  of  political  supervision  and  programme  management 
(chapter 5.2.1) 

2.  How  should  these  functions  be  organised?  Determining  how  many  entities  are 

required to perform all functions identified in the first step (chapter 5.2.2) 

3.  What  should  be  the  legal  form  of  the  entity  in  charge  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 responsibility covers the coordination 
and the monitoring of all activities contributing to the 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 constellation and the ground facilities 
–  security activities to ensure the system is not vulnerable to intrusions and attacks  
–  service enabling activities to allow service provision, define service standards, ensure 

the certification of the services and monitor system performance 
–  service provision, commercialisation 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  magnitude  as  the  European  GNSS  and  to  rapidly 
take  decisions.  For  instance,  this  entity  should  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 

32 

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Figure 2: Functions of political supervision and programme management 

The  governance  of  downstream  application  markets  is  not  considered  in  this  governance 
analysis as it has been treated 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 organised 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 efficiency, governance efficiency, conflict avoidance and time for 
implementation,  showed  that  the  integrated  model  with  one  single  entity  responsible  for 
programme management is considered to be more 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 commercial service (three entity scenario).   

The integrated model has been chosen in order to: 

•  Ensure a consistency between the design of the infrastructure and the operational activities 

and maximise the coherence and efficiency 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 which 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  applications  and  to  enhance  the  quickest,  deepest,  broadest 
development  of  applications  across  all  domains.  This  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. 

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•  Pursue the objectives and principles concerning the governance 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 rationale for an integrated model,  in particular 
for systems whose design requires strong operational coordination.  

The results of this analysis were shared and discussed in detail with stakeholders within the 
working group on the impact assessment (see Annex II for details). 

It should be highlighted that assigning responsibility over all activities to one single E1 entity 
does not determine which activities should be performed internally and which ones should be 
procured.  These  decisions  should  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 States 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  GNSS  policy.  Most  existing  space  systems  are 
currently overseen at national or intergovernmental level: e.g. Eumetsat and Defence systems 
such as Helios (FR), SAR-Lupe (DE), Paradigm (UK). Commercial space systems are being 
overseen  by  private  corporate  bodies  (Inmarsat,  Eutelsat)  after  having  been  initiated  as 
intergovernmental ones. This transition from public to private 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 programmes 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  political  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 objectives 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 the 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"  

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be  an  expedient  solution  for  the  short  term,  the  Commission  should  consider 
whether this would be the most appropriate long term arrangement";76 

-  The  Commission  cannot  at  the  same  time  be  the  'defender  of  the  public 
interest'  authority  overseeing  the  GNSS  markets  and  engage  in  programme 
management activities; 

-  The  Commission's  organisation  and  procedures  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 charge of providing a service; 

-  In this respect, the creation of an executive agency to which the Commission 
could  entrust  programme  management  tasks  for  the  European  GNSS 
programmes  is  not  an  option  as  the  Commission  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  feasible  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 policy options to be further studied is presented hereunder: 

Figure 3: Overview of policy options 

76 European Court of Auditors, The management of the Galileo Programme’s development and validation phase, 

Special Report 2009/7, article 82, p 40 

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35 

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(1) Baseline  

(2) Revised services  

Galileo policy options 

(3) Reduced services  

Problem 1: Way 
forward for the 
European GNSS 
programmes 

EGNOS policy options 

Problem 2: 
Governance scheme 
for the exploitation 
phase 

Programme management 
options 

(4) Degraded services  

(5) Termination of programme 

(1) Provision of services 

(2) Termination of programme 

(1.1) European Commission 

(1.2) EU Joint Undertaking 

(1.3) EU regulatory agency 

(1.4) EU public company 

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 

2 options for problem 2 

–  EU regulatory agency 
–  EU public company 

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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 completion 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 exploitation costs) representing economic impacts 

•  Competitiveness of the EU industry 

The indirect benefits, direct revenues 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  constellation  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  provision  of  EGNOS  services  being  considered  in  all  options. 
Simulations have been performed by the European 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  satellites  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 figure means that for the remaining 0.5% (corresponding to a 
maximum of 1.8 days per year), the performances 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  vertically  (dual  frequency  service),  with  an 
availability of 99.5%. These objectives were based on thorough consultations of end-users in 
numerous sectors, the availability of 99.5% is linked to the aviations standards for safety-of-
life service. By comparison, the 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.  

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Table 2: Simulated navigation accuracy per Galileo infrastructure option78 

(m)/availability 99.5% 

(1) Baseline option 
(2) Revised services option 
(3) Reduced services option 
(4) Degraded services option 
(5) Termination of Galileo programme 

Horizontal accuracy 
Mean 
accuracy 
(99.5%) 
3.3 
3.3 
8 
80 
N/A 

Worst user-
location 
accuracy 
3.7 
3.7 
25 
250 
N/A 

Vertical accuracy 

Mean 
accuracy 
(99.5%) 
7 
7 
11.5 
138 
N/A 

Worst user-
location 
accuracy  
7.4 
7.4 
30 
451 
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  number  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 performance over the world, see Annex VII.  

Furthermore,  the  robustness  of  the  system,  i.e.  the  sustainability  of  system  performance 
under perturbations such as satellite failure needs to be taken into account. Option (4) will be 
less robust as the unforeseen breakdown of one or more satellites would 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 satellites decreases continuously as the constellation ages, and 
therefore a strategy to maintain the constellation 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 illustrated in Table 3. This table is based on the 
information available in September 2011 from the European Space Agency and is deliberately 
simplified. 

Table 3: Availability of services per infrastructure options 
Availability of service as per MRD 
CS 
SAR 

PRS 

OS 

(1) Baseline 
option 

(2) Revised 
option 

(3) Reduced 
services 
option 

Stand-
alone 

With GPS 

Stand-
alone 

With GPS 

Stand-
alone 

Yes 

Yes 

Yes 

Yes 

Yes 

N/A 

Yes 

N/A 

Close to MRD 
but limited 
robustness 

MRD 
compliant but 
limited 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

N/A 

Yes 

N/A 

Yes 

SoL 

Yes 

Yes 

No 

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 

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robustness 

With GPS 

Yes 

N/A 

Yes 

N/A 

Mediocre 
accuracy and 
poor 
continuity 
Reduced service 
level 

No 

N/A 

Mediocre 
accuracy and 
poor 
continuity 

N/A 

No 

N/A 

Yes longer 
localisation 
time and poor 
robustness 
Reduced service 
level 

No 

N/A 

Yes 

No 

Reduced 
capacity 
limited to 
Augmentation 

N/A 

No 

N/A 

Degraded service 
level 

No 

N/A 

(4) 
Degraded 
services 
option 

(5) 
Termination 
of the 
programme 

Stand-
alone 

With GPS 

Stand-
alone 

With GPS 

Service available as per 
mission requirements 

Service reduced 

Service degraded 

Service not available 

It is to be noted that the possibility 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  separate  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 combined performance of the systems perceived by 
the users, taking into account that: 

-  The  operations  of  the  Russian  GLONASS  system  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  important  if  looking  at  the  provision  of  the  OS,  PRS  and  CS 
services. As regards SAR and SoL services: 

•  The SAR service is operational with 18 equipped satellites, and thus its performance does 
not depend on the number of satellites envisaged in the considered infrastructure options, 
though  the  degraded  option  (4)  SAR  could  generate  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  status  of  24  operational  satellites  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  lowest  point  of  just  6  operational  satellites  in  2001. 
Strong political support led to the progressive restoration of GLONASS 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. 

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service, option (2) and (3) will only be able to provide a SoL service 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  their  service  provision.  It  was 
developed  to  provide  a  solid  source  of  market  intelligence  on  GNSS  and  to  measure  the 
impact of the GNSS programmes and action plans 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 approach 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 databases and reports have been consulted and more 
than  20  experts  have  been  interviewed.  The  methodology  of  the  model  together  with 
assumptions used for calculating the indirect economic, 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 contributes to EU GDP, and (2) 
spill-over effects of research and development investments. 

•  The downstream market growth for the EU-27 region represents 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 these technologies (e.g. introduction of 3G boosted the mobile 
phones market). 

•  Public benefits for EU-27 region are externalities divergently 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 
(2) Revised services option 
(3) Reduced services option 
(4) Degraded services option 

EN 

19.94 
19.94 
17.30 
14.83 

40 

26.43 
26.43 
20.64 
15.36 

87.41 
87.41 
73.43 
64.84 

133.77 
133.77 
111.37 
95.04 

   EN 

 
 
 
 
(5) Termination of Galileo programme 

Source: European GNSS Agency 

6.76 

1.27 

15.02 

23.05 

EGNOS  indirect  benefits  are  included  in  all  options.  The  last  option  implies  Galileo 
programme  termination,  but  EGNOS  is  exploited  and  services  are  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 through 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  tool  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 option as adjustments to reflect the other options 
were  not  done.  Consequently,  the  results  of  the  non-monetised  indirect  benefits  estimations 
were not used as an argument in assessing the impacts of different policy options.  

For illustration, the potential social and environmental impacts of option 1 are the following: 

•  6,000 jobs (Net jobs creation from 2015-2027) 
•  8,500 saved lives (Cumulative until 2027) 
•  2,000,000 lives improved (Average from 2015-2027) 
•  1,2 trillion m³ of water saved (Cumulative until 2027) 

6.1.2.  Direct revenues 

Apart from indirect benefits, direct revenues are expected to be generated through the services 
provided  by  the  GNSS  programmes.  The  Exploitation  study81  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  methodology  that  took  into  account  conservative 
assumptions  in  quantifying  direct  revenues  by  taking  into  account  only  services  that  are 
currently being developed. The rationale behind this approach is to avoid overestimating these 
revenues  and  to  avoid  creating  assumptions  that  in  the  medium  term  the  European  GNSS 
programmes can be fully self-financed. Such assumptions in the past led to initiate the public-
private partnership that eventually collapsed (see chapter 2.2).  

The  expected  evolution  of  revenues  from  public  regulated  service  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. 

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necessary  in  the  future.    The  direct  revenues  will  never  have  the  potential  to  offset  the 
operation costs of the programmes 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  services  where  automated  denial  of  access  is 
hardly  conceivable  (e.g.  Safety  of  Life)  could  be  envisaged  through  indirect  charging 
mechanisms. As there is no legal framework for such mechanisms, indirect revenues are not 
considered for the purpose of this impact assessment. 

On the basis of these conservative assumptions, European GNSS direct revenues will account 
for EUR 78-83 million a year on average in constant prices 2011 in the next 20 years (2014-
2034) period for policy options that provide both the PRS and the Commercial Service (see 
Table 5). 

(EUR bn)/constant prices 2011 

Table 5: EGNSS potential direct revenues per option 
CS revenues 

PRS min. and 
max. revenues 

Total  2014-2034 

(1) Baseline option 

(2) Revised services option 

(3) Reduced services option 

(4) Degraded services option 

(5) Termination of Galileo programme 

0.24 – 0.34 

0.24 – 0.34 

0.24 – 0.34 

0.00 

0.00 

1.32 

1.32 

0.00 

0.00 

0.00 

1.61 

1.61 

0.28 

0.00 

0.00 

Potential  revenues  from  the  aviation  sector  could  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 once the final characteristics of the re-profiled 
service will be available. 

Potential additional revenues which could be expected from new features developed for next 
generation  of  Galileo  systems,  such  as  commercial 
to 
telecommunication  payloads  incorporated  into  Galileo  satellites,  have  not  been  taken  into 
account.  Indeed  the  possibility  that  these  revenues  occur  depends  on  technical  requirements 
which have not been thoroughly analysed yet.  

telecommunication 

thanks 

6.1.3.  Analysis of costs 

The  options  vary  regarding  the  number  of  deployed  satellites  and  the  specifications  of  the 
ground segment. These changes have an impact on the total cost of the 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  replacement,  renewal  of  components  with  a  limited  service  life, 
infrastructure  protection  (space  situational  awareness)  They  also  include  system 

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evolution  i.e.  ongoing  improvements  to  the  systems  so  as  to  adapt  services  to  the 
changing  needs  of  users.  The  exploitation  of  the  EGNOS  system  is  ongoing,  Galileo 
system is expected to reach initial operational 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  programmes  based  on  constant  2011  prices.  The 
Galileo  costs  were  segmented  into  9  clusters  (System  Support,  Ground  segment,  Satellites, 
Launchers, Operations, Site Hosting, Management, 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  extension  of  the  ground  segment  network,  deployment  of  sites,  full 
software  qualification,  and  performance  qualification.  The  EGNOS  costs  were  based  on 
extension of the coverage of the system and operation costs of the system. On the top of these 
costs, the impact of risks and contingencies were quantified, divided into space segment risks 
(launch, separation, in orbit transition, satellite failure) and other risks (system development 
and operation/maintenance risks).  

This  complex  methodology  has  been  developed  over  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 robustness of all assumptions taken.  

The  costs  are  modelled  over  a  twenty-year  period  in  order  to  take  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 multiannual 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  costs  concerning  contract  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 

(1) Baseline option 

(2) Revised services option 

(3) Reduced services option 

(4) Degraded services option 

(5) Termination of Galileo programme 

6.1.4. 

Sector-specific impacts 

7.8 

7.0 

6.5 

5.6 

2.4 

12 

11.5 

10.8 

10 

1.4 

Total 

19.8 

18.5 

17.3 

15.6 

3.8 

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  marketing,  sales,  after-
sale  model.  This  however  does  not  automatically  translate  into  an  improvement  of  EU 
international  competitiveness.  Competitiveness  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,  innovative  and/or  commercial 
competitiveness. 

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Whenever  possible  and  appropriate,  the  analysis  reviews  in  particular  the  impact  on  the 
competitiveness  of  the  sector(s)  targeted  by  the  initiative,  their  suppliers  (upstream  sectors) 
and  their  clients  (downstream  sectors  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  depending  on  service  provision  supplying 

hardware and software needed to exploit satellite signals  

•  End-users: industries using services and applications   

Figure 4: Value-chain of industries affected by the GNSS programmes 

Particular attention is devoted to the European applications industry and to end-users, where 
the biggest competitiveness impact is expected, applying a general argumentation as is used 
for the other parts of the value chain82. 

The  competitiveness  impact  of  the  various  options  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 identified in section 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 – Sector-specific impacts  

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Options (1) and (2) are likely to boost significantly EU innovative competitiveness, 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  likely  impact  on  EU  industrial  competitiveness,  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  navigation)  and  commercial  applications.  Moreover, 
GNSS  is  an  enabling  technology  for  intelligent  transport  systems  (ITS)  including  road  user 
charging. 

The  development  of  an  European  GNSS  industry  would  stimulate  competitiveness  through 
innovation. Technological innovation and new e-business models could significantly 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 introduction of Galileo will allow the operators to limit 
the level of fraud by its authentication and integrity features. 

These two example technologies are emerging and will contribute to the growth of the GNSS 
road  market  to  ~€30  bn  worldwide  by  2020  with  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  reach  80%  by  2015  while  in-vehicle  devices  will 
continue  to  growth  to  50%  by  2025,  with  a  continuous  technologic  evolution  towards 

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dynamic route navigation and anti-theft features, improving safety, comfort and effectiveness 
of road travelling. 

Table 7: Summary of the competitiveness impact 

(1-2) Baseline and 
revised services options 

Upstream 
Service provision 
Downstream 
End-users 
Total 

+ + 
+ + 
+  
+ + 
+ + 

(3-4) Reduced and 
degraded services 
options 
+ 
+ 
+ 
+  
+ 

(5) Termination of 
Galileo programme  

– 
– 
– 
0 
– 

– : negative impact on competitiveness 

+ : positive impact on competitiveness 

6.2. 

Analysis  of  impacts  for  problem  2:  Governance  scheme  for  the  exploitation  of 
both Galileo and EGNOS systems  

While  the  choice  of  a  way  forward  on  the  further  implementation  of  the  European  GNSS 
infrastructure  (Problem  1)  can  be  measured  in  terms  of  direct  and  indirect  environmental, 
economic and social impacts against 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  structure  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 specific legal form should aim at identifying the 
most  efficient,  effective,  coherent  legal  and  financing  framework  for  managing  the 
exploitation of the European GNSS programmes. Therefore, the options for problem 2 will be 
assessed qualitatively in terms of their compliance with the objectives as outlined in section 
4.2. On these grounds, the impact of a specific legal form will be identified and expressed in 
terms of their effectiveness, efficiency and coherence 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 roles83, 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 

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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  agencies  allow  a  strong  coherence 
between the European GNSS programmes' exploitation 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 Parliament, for budget implementation.  

Regarding efficiency, while the general pattern of regulatory 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  notably  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 suitable candidate amongst these and will require 
particular attention when developing a concrete 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 the number  of EU agencies which make it 
unlikely that Parliament or Council will 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 Conclusions 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 Galileo 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 transition, 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 linked 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 EGNOS programme and/or of the preparation of 

86  

85  See  European  Parliament  Conference  of  Presidents  meeting  minutes  05.05.2011,  agenda  item  5.1: 
http://www.europarl.europa.eu/RegData/organes/conf_pres_groupes/proces_verbal/2011/05-05/CPG_PV(2011)05-
05_EN.pdf  
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. 
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. 

87  

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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 company with shares at least partly held by the 
European Union would raise significant issues in terms of feasibility: 

•  While purely corporate matters would be subject 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 status of EC civil servants seconded in the company would 
need to be clarified. However, for the creation of a status of an 'EU public enterprise', 
i.e.  of  corporations  controlled  by  the  Commission  there  are  neither  precedents  nor 
clear rules; 

•  The  complexity  of  the  work  that  would  have  to  be  undertaken  is  illustrated  by  the 
areas  for  which  legislation  would  have  to  be  proposed,  including  (i)  defining  the 
procedure and conditions of approval of the investment of the EU in a company, (ii) 
determining the conditions of governance of the company, (iii) spelling out the rules 
applicable  to  the  privatisation  of  such  company  and  (iv)  clarifying  and  if  necessary 
extending  the  mandate  of  the  European  Court  of  Auditors  (as  defined  by  art.  287 
TFEU) to cover also the EU public enterprise.88 In short, the creation 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 company will raise the same liability and tax 

issues as a private company; 

•  Finally, the operation of such company would continue to be based 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  the  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. 

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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  technical  characteristics  of  the  options  and  their 
impacts as described in chapter 6.1 in combination with detailed information on effectiveness 
in  Table  10.  In  Table  8  below  the  main  findings  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  with  GPS  while  all  other  services  can  be  provided  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  disruption  from  other  systems.    The  sustainability  of 
system  performance  under  option  (3)  for  the  open  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 operate 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 
Build Europe's 
Increase resilience 
Set up an 
technical GNSS 
of EU economic 
Independent 
capability 
infrastructure 
GNSS 

(1) Baseline  

(2) Revised services  

(3) Reduced services 
option 
(4) Degraded 
services option 
(5) Termination of 
Galileo prog. 

100% 

75% 

75% 

0% 

0% 

100% 

100% 

50% 

0% 

0% 

100% 

100% 

100% 

25% 

0% 

: No compliance to objective                                                    

: Full compliance with objective 

Efficiency 

Efficiency of the policy options is assessed based 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  explained  by  the  inflexibility  of  the  ground  segment 
design  which  offers  poor  cost  containment  opportunities  resulting  into  overall  low  cost 
elasticity of the options. The difference in costs between option (1) and option (2) for a period 
2014-2034 is less than one billion EUR while delivering 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  degraded  option  (4)  decreases  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 January 2009, chapter 11.6 p71 

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budgetary  needs  expressed  for  the  next  Multiannual  Financial  Framework  by  artificially 
decreasing them. 

(EUR bn) 
Constant prices 2011 and 
discounted prices at 4% 

Table 9: Cost-benefit analysis of policy options: 2014-2034 

Indirect benefits  Direct revenues 

Costs 

Net benefits 

Constant 
prices 

Discount. 
prices  

Constant 
prices 

Discount. 
prices 

Constant 
prices 

Discount. 
prices 

Constant 
prices 

Discount. 
prices 

(1) Baseline  

133.77 

81.26 

(2) Revised services  

133.77 

81.26 

111.37 

67.59 

1.61 

1.61 

0.28 

1.05 

1.05 

0.20 

19.8 

18.5 

17.3 

14.65 

115.58 

67.66 

13.69 

116.88 

68.63 

12.80 

94.35 

54.99 

95.04 

57.53 

0.00 

0.00 

15.6 

11.54 

79.44 

45.99 

23.05 

14.00 

0.00 

0.00 

3.8 

2.81 

19.25 

11.19 

(3) Reduced services 
option 
(4) Degraded 
services option 
(5) Termination of 
Galileo programme 

Coherence 

Coherence  of  the  policy  options  with  EU  objectives,  strategies  and  priorities  is  detailed  in 
Table 10. There is no difference on this aspect between options (1) and (2) as both are in line 
with the EU political framework, have a high positive 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 and 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 efficiency, effectiveness and coherence compared 
in  Table  10  and  in  particular  the  potential  cost  savings,  it  appears  that  the  option  (2)  – 
Revised services is the preferred option.  

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Effectiveness 

Efficiency 

Coherence 

Table 10: Effectiveness – Efficiency – Coherence comparison for problem 1 

(1) Baseline 
option 

(2) Revised 
services 
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 

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 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 (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, technical 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. 
The long-term investment would enable positive trade-offs, especially concerning 
indirect benefits 
Full development of industrial, technical 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 

(4) Degraded 
services 
option 

Does not achieve all general and specific objectives: 
- there is no independent GNSS, indirect 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 
Does not achieve all general and specific objectives: 
- there is no independent GNSS, indirect 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 

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 
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 

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Does not achieve neither general, specific nor operational 
objectives, only EGNOS is available 

(5) 
Termination 
of Galileo 
programme 

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, technical 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 

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7.2. 

Comparing the options for problem 2: Governance 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 set-up is highly coherent, effective and efficient 
from an EU point of view.  As mentioned in chapter 6.2.1, the most appropriate existing EU 
regulatory  agency  to  take  on  the  programme  management  tasks  is  the  European  GNSS 
agency. 

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Table 11: Effectiveness – Efficiency – Coherence comparison for problem 2 

Baseline option: EU political supervision 

Effectiveness 

Efficiency 

Coherence 

•  Strong feasibility: requires only ad-hoc EU legal 

•  Medium evolutivity, requiring amendments of the EU 

•  Strong consistency with EU policies: EU rules 

EU Regulatory 
Agency 

basis to be established 

legal basis establishing the agency 

•  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 

•  Positive impact on EU economy: Focus put on 

maximise diffusion of services 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 

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 national 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 expenditures, the indirect 
benefits for the EU economy are secondary.  

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 
•  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 

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8. 

MONITORING AND EVALUATION  

The  proposal,  once  adopted,  will lead  to  the  further  implementation  of  the  European  GNSS 
programmes. Evaluation of these programmes will 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  Plan  on  Global  Navigation  Satellite  System 
Applications90 

Table 12: Indicators 
Indicator 

Type of indicator 

Level of objective 
Specific policy objective  Output indicator  -  Characteristics, quality and specifications of 
the  services  of  Galileo  are  in  line  with  the 
the  Mission 
and 
GNSS 
Requirements Documents 

regulation 

General policy objective  Result indicator 

-  Characteristics, quality and specifications of 
the services of EGNOS are in line with the 
GNSS 
the  Mission 
and 
Requirements Documents 

regulation 

-  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 

-  Competitiveness  of  the  European  based 
GNSS  industry  Widespread  use  of  the 
services  (market  penetration,  number  of 
jobs created, market share etc.) 

-  Indirect  and  direct  benefits  enabled  by  the 

GNSS programmes  

8.2. 

Monitoring and evaluation  

The Commission will ensure that all contracts and 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 mechanisms will be on minimising programmes' cost 
overruns and delays in delivering of the services.  

90  COM(2010)308  of  14.6.2010,  Impact  assessment,  accompanying  document  to  the  Communication  of  the 

European Commission on Action Plan on Global Navigation Satellite System (GNSS) Applications 

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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 Galileo and EGNOS programmes at latest by 30 
June 2014;  

−  an annual work programme translating the strategic framework into detailed measures 

and indicators to be proposed at latest by 15 December of the preceding year; 

−  an  annual  implementation  report  evaluating  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 and 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  Commission  in  exercising  its  powers  of  political 
supervision  over  the  Galileo  and  EGNOS  programmes  will  strengthen  the  monitoring  and 
evaluation mechanisms over the programme management entity by requesting detailed annual 
management  plans  and  implementation  reports  as  well  as  steering  regular  programme 
progress meetings and carrying out financial and technological audits.  

In addition, the monitoring of the programmes should associate Member States for example 
by  relying  on  their  technical  capabilities  to  provide  input  on  technical  monitoring  of  the 
programmes and on proposing key performance indicators against which the programmes will 
be evaluated.  

Finally,  in  the  day-to-day  management,  the  Commission  commits  to  propose  a  risk 
management  mechanism  and  appropriate  management  tools  to  minimise  the  probability  of 
programme cost overruns based on better cost estimation, taking stock of previous experience 
and actual system implementation.  

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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 

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ANNEX  I  -  OVERVIEW  OF  THE  MID-TERM  REVIEW  OF  THE  EUROPEAN  SATELLITE  RADIO 
NAVIGATION PROGRAMMES (COM(2011) 5 FINAL) 

The  European  satellite  radio  navigation  programmes  are  beyond  the  financial  and  technical 
capacity of individual Member States and therefore fall within the competence of the EU. In 
addition and especially given their security requirements, all the EU Member States have to 
be involved in them. 

Since  the  reform  of  the  programmes'  governance  in  2007  the  Commission  has  recorded 
several  successes:  EGNOS  has  become  operational  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  infrastructure  have  been  taken  on  the  regulatory 
front, with regard to international aspects and in respect of future uses. 

However,  the  programmes  are  now  faced  with  fresh  challenges  arising  from  the 
materialisation of a number of risks which were previously identified by the Commission, and 
the  organisation  of  the  programmes  must  be  further  fine-tuned  in  order  to  increase  their 
efficiency. The project has experienced cost overruns attributable in particular to the increased 
cost of the development phase, the increased price of the launchers, the lack of competition 
for the award of some packages and additional 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 additional 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. Accordingly, 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 the 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  dependent  on  mastering  and  using  leading-edge 
technologies  such  as  those  relating  to  nuclear  fusion,  space,  air  traffic  management  and  life 
sciences,  it  is  important  to  reach  decisions  about  the  means,  including  budgetary  means,  of 
coping with the risks inherent in such technologies. Conclusions also need 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 those concerning the governance framework. This must seek to make 
all the players more aware of their 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.  

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ANNEX II - OVERVIEW OF THE STAKEHOLDER CONSULTATIONS 

The European Commission participated at the following events in order to meet and discuss 
with  a  variety  of  stakeholders.  The  representatives  of  the  Commission  were  invited  as 
speakers to these events and the Commission was usually present with a stand.  

Stakeholder 

Subject 

When and how 

Targeted consultations 

Member states, downstream 
industry, industry 
associations, ESA, GSA 

Member states, ESA, GSA, 
selected industry experts 

Member states, ESA, GSA 

Public consultations 

General public 

General public 

General public 

−  Future of the Galileo and 
EGNOS programmes 
−  Future services provision, 

marketing, costs 
evolution, risk analysis, 
future governance 

−  Problem definition  
−  Assessment of policy 

options for completion of 
the Galileo system 
−  Assessment of impacts 

−  Problem definition 
−  Assessment of policy 
options for future 
governance 

−  Assessment of impacts 

−  Galileo programme 
−  Satellite positioning 

systems 

−  Space activities 
− 

Independent positioning 
system for Europe  
−  Space programme 
− 

Importance of satellite 
based services 

Conferences and workshops 

Political stakeholders, 
navigation specialists, 
navigation researches, 

−  Satellite navigation, 

current status quo and 
trends 

In 2009, 2010 and 2011 

of 

study 

frame 

the 
In 
the 
(2009) 
Exploitation 
the  future 
which  assessed 
evolution  of  the  European 
GNSS 
after 
programmes 
2013: 

−  more than 50 interviews  
−  3 round tables 
−  Joint working group 

(2010) to define possible 
options and their impacts 
−  Meeting on the impact of 
various policy options 
(2011) 

−  Cost analysis (2010) [,,,] 
−  Working group on future 

governance of the 
European GNSS 
programmes (2011) 

In 2007 and 2009 

Eurobarometer 
June 2007 

survey 

in 

Eurobarometer survey in July 
2009 

Public  consultation  on  a 
Space 
EU 
possible 
Programme 
- 
in 
March 2011 

January 

Only  the  latest  conferences 
in 2010 are listed 

−  SAT Expo Europe 2010 
−  Munich Satellite Summit 

2010 

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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 

Downstream industry focused 
on aviation applications 

−  EGNOS for agriculture 

−  DLG Field Days 
− 

Intergeo 

−  EGNOS for aviation 

−  Airport Exchange  
−  ATC Global 
−  Aero-Expo 

Friedrichshafen 

ILA Berlin  

−  EBACE 
− 
−  Farnborough Air Show 
−  Europe Regional Airlines  
−  SMAG 
−  ASECAP  

Transport Research Arena  

Downstream industry focused 
on road applications 

−  EGNOS for road 

transport 

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ANNEX III - STUDIES AND ARTICLES 

Strategic input 

–  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  intergovernmental  organisation  for  search  and 
rescue primarily on the requirements and expectations of users on the quality of services 

–  Exploitation  Study  (2009),  Roland  Berger  Strategy  Consultants,  commissioned  by  the 

European Commission  

–  Radio Frequency Interference Impact Assessment on Global Navigation Satellite 

Systems (2010), Joint Research Centre, European Commission 
http://publications.jrc.ec.europa.eu/repository/bitstream/111111111/13508/1/reqno_jrc557
67_radio_frequency_interference_impact_assessment_on_global_navigation_satellite_syst
ems%5B1%5D.pdf  

Reliance on GPS 

–  Global Navigation Space Systems: reliance and vulnerabilities (2010), UK Royal 

Academy of Engineering 
http://www.raeng.org.uk/news/publications/list/reports/Global_Navigation_Systems.pdf   

–  Why Europe needs Galileo (2010), European Space Agency 
http://www.esa.int/esaNA/GGG0H750NDC_galileo_0.html   

–  GNSS  and  Critical  Infrastructure  of  Electronic  Communication  (2010),  Research 
Institute  of  Posts  and  Telecommunications  Slovak  Republic,  commissioned  by  the 
Ministry of Telecommunication in the Slovak Republic 

–  Vulnerability  assessment  of  the  transportation  infrastructure  relying  on  the  global 
positioning  system  (2001),  John  A.  Volpe  National  Transportation  Systems  Center,  , 
commissioned  by  Office  of  the  Assistant  Secretary  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  Criticality  Assessment  Preliminary  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  

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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  and  goods  and  services.  GNSS  could  in  future 
become  as  important  and  as  crucial  for  the  European  economic  fabric  as  are  fossil  fuels  or 
telecommunication satellites today. 

However, for this growth and modernisation potential to materialise, the provision of GNSS 
services must be available (24 hours a day and 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-European  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-supply  risk  together  with  the  abuse-of-a-dominant-position  risk 
negatively impacts on the cost competitiveness of (European) business and clients. It requires 
indeed  continuous  investment  in  back-up  technologies,  which  accounts  for  several  billion 
euros per year91. 

Second, these risks serve as a premium for incumbents on existing markets as they have built 
up  the  necessary  old-fashioned  knowledge  through  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  market  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 European industry depends to a large extent on the 

91  

92  

93  

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. 
Cf.  auto-piloted  landing  of  aircraft  or  auto-piloted  road-transport  (passenger  cars  or  light  and  heavy 
duty vehicles) on long-distance motorway trips. 
[Please refer to the numerous studies quoted on this in other parts of the impact assessment.] 

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speed  and  quality  of  activating  this  cost-saving  potential  in  Europe  as  compared  to  other 
regions  of  the  world.  Indeed,  as  GNSSs  provide  their  services  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 comes free of charge and without encryption. 

Thus, the existence of a significant 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 efforts also need to be supported by a 
more  holistic,  deliberate  and  ambitious  European  innovation,  modernisation  and  growth 
strategy:  the  Europe  2020  strategy.  Concretely  the  European  industry  needs  a  credible 
assurance  that  the  Galileo  initiative  has  reached  a  point  of  no  return  and  that  exit  from  this 
ambitious project is no option. Without this planning security, European industry will not be 
in a position to fully go for harvesting the cost-reduction potential sketched above. 

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EN 

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Table 13: Sector-specific analysis of competitiveness impacts  

Cost / Price competitiveness 

Innovative competitiveness 

Commercial competitiveness 

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 could 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. 

The build-up and operations of Galileo 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 investments and realisations.  
If Galileo is terminated, the technology 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. 

m
a
e
r
t
s
p
U

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 procurements) contracts. 

– 

– 

(1-2)  high  positive  effect  due  to  periodic  renewal  of  the  whole 
system 

(3-4) lower positive effect, due to degraded system and associated 
development of the industry 

– 

– 

(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 

– 

– 

– 

(1-2)  medium  positive  effect  building  on  the 
"most advanced system" effect 

(3-4) smaller positive effect 

(5) no effect 

–  (5) no effect on competitiveness 

–  (5)  negative  effect,  resulting  from  the  likely  lost  of  some  of  the 

early R&D investment 

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Cost / Price competitiveness 

Innovative competitiveness 

Commercial competitiveness 

The current structure of the industry is quite particular. There are only 
four entities operating 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 service 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 chosen 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 development 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 negotiate with its suppliers. It would for 
instance not have to pay a premium 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  

s
r
e
d
i
v
o
r
p
e
c
i
v
r
e
S

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. 

Largely irrelevant con sidering the structure of this 
industry and the nature of this market 

– 

– 

(1-2)  high  positive  effect  due  to  framework  conditions  for  new 
technological development the creation high investments and the 
capacity to provide improved data 

(3-4)  smaller  positive  effect  due  to  degraded  system  and  lower 
investments 

–  (5)  not  applicable  (if  the  EU  GNSS  industry  disappears,  its 

competitiveness is no longer an issue)  

–  (5) possible negative effect on EGNOS 

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Cost / Price competitiveness 

Innovative competitiveness 

Commercial competitiveness 

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. 

With reassurance on long term provision of Galileo signals, the 
applications industry will move more quickly to mass market stage in 
a number of cases, which would bring large economise of scale. 
Telelommunication operators in particular 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 and services are also likely to 
increase economies of scope. Sectors 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 from other industries (cf. telecom 
operators) should increase competition 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 barriers, 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 the 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 security of signal supply & abuse-
of-dominant-position risks woudl not result in significant 
competitiveness improvments.  

m
a
e
r
t
s
n
w
o
D

– 

– 

– 

(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 the 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 Galileo programme, gaining worldwide 
market share. This EU industry is indeed engaged in the 
miniaturisation of GNSS receivers, the reduction of power 
consumption, …, increasing technological complexity in the receiver. 
The 7th FP94 is supporting the development of these 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  

94 The Seventh Framework Programme for research and technological development (FP7) is the Commissions main instrument for funding research over the period 2007 to 2013 

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Cost / Price competitiveness 

Innovative competitiveness 

Commercial competitiveness 

The introduction of advanced GNSS-based applications in a growing 
number of sectors would lead to better allocation of resources, cost 
reduction and efficiency gains. These are for instance expected for  
* road user charging (thanks to the authentication service),  
* logistics fleet management  
* rail freight management (thanks to the continuity and availability of 
Galileo) 
* management of electricity grids 
* precision GNSS is expected to become a productivity tool in sectors 
such as construction, mining, agriculture 
This effect should be moderate rather 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. 

s
r
e
s
u
-
d
n
E

EGNOS / Galileo-based applications provide many opportunities to 
European based firms in terms of product innovation and 
differentiation such as: 
* pay-per-use insurance (car insurance based on driving type, pattern 
and travelled kilometres) 
* tourist and rescue services 
* new techniques of law enforcement 

Too many different (potential) end-users to draw 
general conclusions. 

– 

– 

– 

(1-2)  medium  positive  effect  due  to  the  improvement  of  the 
functioning of existing markets and higher productivity 

– 

(1-2) medium effect due to the process/product innovation and the 
creation of many new markets or segments 

(3-4) smaller effect 

– 

(3-4) smaller effect due to lesser technologic evolution 

(5) no effect (as this option would deprive EU end-users from an 
opportunity) 

–  (5) no effect (as this option would deprive EU end-users from an 

opportunity) 

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Specific study on GNSS exploitation 

An extensive study95 has been done to understand the market dynamics of sectors affected by 
the  European  GNSS  Programmes  and 
their 
the 
competitiveness. 

these  programmes  on 

impact  of 

First,  a  market  segmentation  has  been  done  based  on  existing  Commission's  studies  and 
external  reports.  Second,  through  several  'round-tables'  with  experts  and  end-users  and 
numerous interviews with stakeholders throughout the value chain, a thorough market review 
has been carried out for the most important markets. Finally, an assessment of the demand by 
2020 was performed. 

Following sources were used during this study: 

General studies: 

Sector specific studies on applications:  

Studies used for business modelling: 

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 
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 

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  macro  independent  segments  with  homogenous  features  to  be 
deeply  analyzed  in  the  strategic  assessment:  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 strategic assessment is detailed hereunder. 

95 Exploitation Study (2009), commissioned by the European Commission 

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Market analysis for road applications 

GNSS market size [€bn, worldwide]
GNSS market size [€bn, worldwide]

Main demand drivers on PNT market
Main demand drivers on PNT market

27,0

5,0

29,9

8,1

Services

22,1
2,3

CAGR 10-20

• Increasing demand for location based services

+13,4%

and In vehicle devices)

• Significant decrease in navigation devices prices (PNDs

• Improving capabilities and performance of GNSS 

receivers and related applications

Products

19,8

22,0

21,8

+1,0%

• Increasing awareness of social, economic and 

environmental consequences of road traffic increase

2010

2015

2020

• On going national and European regulations (e-Safety, 

road tolling interoperability...)

Assessment of GNSS potential
Assessment of GNSS potential

Opportunities & threats for GNSS
Opportunities & threats for GNSS

• Navigation applications will continue their growth due to 

• Opportunities:

the increasing penetration rate of navigation devices and 
the development of improved content

• For 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

– 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

• Threats:

– 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)

1.  Market definition  

GNSS road transport is a wide-ranging and complex market segment combining mass-market 
applications  (in-vehicle  navigation)  and  commercial  applications.  Moreover,  GNSS  is  an 
enabling technology for intelligent transport systems (ITS) including road user charging. 

The  market,  as  perceived  by  the  end  user,  is  definitely  wider  than  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 requirements, not necessarily based on GNSS. In 
all case, GNSS road transport applications require: 

(cid:131)  an  adequate  signal  or  combination  of  signals  from  the  satellite  constellation  and  the 

corresponding ground segment, 

(cid:131)  a device, in-built by the vehicle manufacturer or portable mobile handset and  
(cid:131)  a  commercial  or  public  entity  with  the  required  facilities  (ground  infrastructure,  reliable 
and updated content sources, etc.) and entrepreneurial capacity to deliver and manage the 
service 

2.  Demand drivers and trends 

Demand drivers 

The following factors will foster the take-up of GNSS-based road applications:  

(cid:131) 
(cid:131) 

the necessity for public authorities and road users to avoid traffic congestion;  
the increasingly widening policy amongst municipalities aiming limiting the use of cars in 
urban areas for public health and environmental reasons; 

(cid:131)  safety concerns (emergency calls, ADAS, etc),  
(cid:131)  eco-driving and eco-routing to reduce the CO2 emissions 

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(cid:131)  a continuous reduction in the prices of car receivers and more integrated services available 

(cid:131) 
(cid:131) 

(cid:131) 

(e.g. traffic information, weather forecast, increase map-updating, etc); 
the growing processing power of handsets; 
trend towards the systematic inclusion by the automotive industry of GNSS receivers in 
new cars; 
the  gradual  entry  into  service  of  intelligent  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 development of GNSS-based road services are: 

(cid:131) 

(cid:131) 

(cid:131) 

insufficiently  agreed  standards,  that  may  lead  to  a  vertical  integration  between  services 
providers and receivers manufacturers and thus to a decreased competition on the market; 
the absence today of technical solution ensuring the authentication of a position produced 
by a GNSS receiver; 
Inconstencies in regulatory  initiatives concerned with positioning. 

Market trends 

Personal  Navigation  Devices  have  been  the  main  driver  for  the  car  navigation  market.  The 
sales of affordable, feature-rich, and easy to use PNDs have grown more than 100% in recent 
years, with companies such as Garmin, TomTom, and Mio dominating the market. Features 
such as speech recognition, multimedia playback, and digital cameras have recently become 
available on high-end PND devices.  

Factory-installed  navigation  systems  and  aftermarket  navigation  solutions  have  been  much 
less  popular  due  to  high  prices  and  lack  of  portability.  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 thanks 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 systems has remained largely stagnant over the last 
ten  years.  Some  experts  point  out  that  there  has  been  low  responsiveness  in  car  makers  to 
GNSS-related  innovation  lag  compared  to  vehicle  adapted  personal  navigation  device  (e.g. 
Tom-Tom or Garmin).  

This market nevertheless evolves from the pioneering phase to mass market penetration. For 
example,  in-vehicle  navigation  is  quickly  gaining  market  share  under  the  push  of  hand 
portable  device  based  solutions.  Other  applications  like  road  use  charging  and  intelligent 
speed assistance could become widespread in relatively 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  positioning  in  these  target  markets,  the  general 
outlook is that satellite positioning will have a more and more relevant 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 ITS. Currently U.S. Wide Area Augmentation 

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System  (WAAS)  and  EGNOS  enabled  receivers  are  beginning  to  become  the  default  GPS 
receiver  bringing  improvements  in  accuracy  and  making  the  integrity  signal  available  for 
applications involving user dependence, 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 application 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  value  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 application, be a combination of sales of receivers 
and services at a certain price level, applied to a more or less expanded population of vehicles.  

Estimates of market size 

For  the  road  segment,  forecasts  differ  significantly  from  a  study  to  another  although  on 
similar perimeters. For example, in the horizon 2020, estimated revenues96 vary between € 70 
and  €  120  billion  in  the  respectively  worst  and  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 

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conservative existing assumptions, the value generated by Road applications would approach 
€ 50 billion by the beginning of the 2020s98.  

This study has reviewed the assumptions developed under previous studies. This review has 
led  to  a  more  careful  scenario  as  to  the  total  number  of  vehicles  during  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 depletion of fossil resources and increasing concerns on greenhouse 
gases emissions99.  

This  revised  assumption  leads  to  an  even  more  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 conservative scenario accounting 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,  combining  both  a  large  market  size  (and  thus 
presumably  accounting  for  indirect  benefits)  and  significant  direct  revenue  potential  for  the 
prospective GALILEO Operating Structure (direct benefits).  

The  navigation  applications  and  positioning  management  applications  will  be  detailed 
hereunder. In Figure 8 the typology of these kind of applications is explained and in Figure 9 
the value chain is detailed. 

98   Cf.  Based  on  a  review  of  underlying  assumptions  in  the  various  estimates.  The  forecast  focuses  on  long 
trends; it goes beyond the current economic context, assuming 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.  

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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  applications  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  terminal  provides  vehicle  location  and  time  that 
facilitates the provision of services aimed at improving the safety, 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 alarm and recovery.  Many of these services are 
provided on a subscription basis. 

Telematics is a combination of telecommunications and network computing. 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 

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to deliver valuable data for a variety of applications and are expected to grow substantially in 
the future.  

Penetration rates should continue to increase, the presence of on-board units, 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 time. 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 constellation, 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  driver  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 risk of an accident occuring. Then, the systems can 
either  warn  the  driver  so  as  to  take  avoidance  steps  or  can  automatically  initiate  the 
appropriate  actions.  An  indicative  list  of  ADAS  classified  on  their  level  of  autonomy  or 
integration in an cooperative ITS environment is provided in Table x. 

Advanced Driver Assistance 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 intersection 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 vehicle positioning mechanisms and thus involve 
the use of an onboard GNSS terminal. In particular, GNSS is critical for ADAS co-operative 
systems where assistance is provided from roadways and/or from other vehicles, requiring the 
exchange  of  Position  Velocity  Time  (PVT)  information.  Of  course,  ADAS  requires 
information  not  only  from  a  GNSS  receiver  but  also  from  other  onboard  sensors,  vehicle 
radars  and  actuators  or  information  receive  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  accuracy  (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 certification of Galileo and of the 
ADAS equipment will be needed as is the case in the aviation or marine domains.  

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The term ADAS covers a variety of applications differing from the environment in which they 
are  relevant,  from  the  functionalities  offered,  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  liability  in  case  of  malfunctioning  of  the  system 
resulting in damages to the driver, to the passengers 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 achieve significant progress in market awareness and 
to overcome strong cultural and psychological impediments.  

The main obstacles today to the advent of ADAS are: 

(cid:131)  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. 

(cid:131)  ADAS requires the availability of a number of infrastructures and of their regular update. 
A  typical  example  is  maps,  which  need  to  fulfil  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 achieved on a large coverage basis. 
(cid:131)  The  mass-market  introduction  of  ADAS  requires  solving  a  number  of  regulatory  issues 
instance,  certification  procedures  as  explained  above,  standard  and 
like, 
interoperability as well as liability in case of malfunctioning; it also assumes a readiness 
by end users to entirely trust devices and applications supposed to replace, to a significant 
extent, their own intelligence and judgment. 

for 

(cid:131)  The cost of ADAS is still prohibitive for introduction on lower segment vehicles and user 
willingness to pay seems to go more in the direction of comfort systems rather than safety 
systems. 

In conclusion, ADAS is still in its infancy compared 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  serious  hint  of  what  market  take-up  would  look 
like.  It  is  likely  that  it  will  be  resulting  by  the  combination  of  regulation,  vehicle  makers' 
differentiation strategies and reaction by customers. 

II. 

Positioning management applications 

eCall – Emergency Call Services 
eCall stands for "automatic in-vehicle emergency call system". The eCall 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 the emergency centre after a small delay due 
to  the  automatic  transmission  of  the  Minimum  Set  of  Data  (MSD),  including  time-stamp, 
vehicle location and propulsion 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 location can be determined to within 10 metres 
using  absolute  positioning.  In  the  future,  Galileo  will  allow  the  positioning  be  even  more 
precise, i.e. within one metre.  

The  use  of  such  accuracy  will  for  instance  allow  a  motorway  operator  to  discriminate  on 
which side of the road the accident occurred, which is an important information to drive the 
nearest rescue team to the place and to warn drivers going in the same direction.  

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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  accident  it  transmits  to  the  most  appropriate  PSAP  the  MSD 
containing the following information: 

(cid:131)  Timestamp 
(cid:131)  Vehicle location and direction (provided by GNSS) 
(cid:131)  Vehicle propulsion storage type 
(cid:131)  Number of passengers (if available) 
The  implementation  of  the  eCall  service  requires  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  interoperable  EU-wide  eCall  service  in  the  EU  has 
been in the agenda of the European Commission 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  directly  affected  by  eCall  are  supporting  its  deployment  under  the 
condition that the implementation will be undertaken in parallel by all actors (mainly OEMs, 
MNOs and PSAPs). More than 80% of the people responding to the public consultation find 
the eCall system useful and they would like their vehicle to be equipped with eCall.  

Numerous  studies  on  eCall  have  shown  that  the 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. Just to name two, traffic management is improved through GNSS road 
tolling and real-time travel information is provided directly to the driver to avoid congested 
areas. The introduction of the eCall system in the vehicles could also contribute significantly 
to  the  deployment  of  a  European  market  for  GNSS  applications,  widely  promoted  by  the 
European  Commission  which  has  recently  (June  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 Finland100. The key evaluation results of that 
study indicate that the eCall system could very probably have prevented 4.7% of the fatalities 
in accidents involving motor-vehicle occupants. In the accidents involving fatal unprotected 
road user, however, the system could probably have 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  involving  motor-vehicle  occupants  (82%),  the 
emergency call had been made within five minutes of the accident. However, in 14% of the 

100   The technical report is published in Finnish (Virtanen 2005) 

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cases the emergency call had been made 5–30 minutes 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  benefit-cost  ratio  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.  The  study  also  indicated  a  need  for  developing 
statistics on severely injured accident casualties.   

The  consumers  are  also  interested  in  emergency  call  systems.  An  interview  of  almost  100 
drivers made in March 2004 revealed that an automatic 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 emergency 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 third of the drivers were willing to pay 100-299 euros for eCall 
equipment  and  one  third  500-999  euros.  (Ministry  of  Transport  and  Communications  of 
Finland 2004). 

Road user charging (RUC) 
The  main  objective  of  road  user  charging  based  on  GNSS  solutions  is  linked  to  policies 
developed by the Member States to fight congestion, finance the 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 potentially high potential, 
as  interest  of  governments  is  increasing  for  reducing  traffic  congestion  and  its  collateral 
damages to the economy and the environment, while 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  Europe  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  downtown  area  of  large  conurbations,  like  London, 
Stockholm and Milan, but could gain momentum with growing concerns of public authorities 
for avoidance of traffic nuisance in urban areas.   

Growing congestion problems and greening of transport 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  the  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  based  on  different  technologies 
raises the problem of interoperability across different countries. 

So  far,  progress  of  electronic  (or  'virtual  gate')  tolling  fee  collection  has  been  slow,  in  the 
absence of legal obligations, despite 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 

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technology  used  in  RUC  is  a  combination  of  GNSS  and  GSM-GPRS.  The  first  European 
satellite-based toll collection system 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 conditions of use of GNSS for tolling allow the 
operators to limit the percentage of fraud to the level they have with competing technologies 
like DSRC.  

GNSS  based  solutions  are  technically  more  appropriate  for  dense  networks  of  roads  and 
streets,  especially  as  they  do  not  require  huge  investments  in  roadside  equipment.  GNSS- 
based solutions offer advantages in the following situations: 

(cid:131)  dense  and  complicated  networks  of  tolled  roads  with  no  planned  tolling  facility  (toll 

plazas, gantries…)  

(cid:131)  widespread  tolling  (e.g.  most  highways,  and  not  only  motorways,  become  subject  to 

tolling), 

(cid:131)  possible interoperability with networks and 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  billion  to  the  German  authorities).  However, 
alternative  systems  are  expensive  too.  A  comparative  cost-benefit  analysis  covering  all 
relevant cost-factors and the cycle of economic life (obsolescence) of the alternative solutions 
could justify GNSS-based system for motorways usage, e.g. at pan-European level. 

Beside  these  factors  related  to  the  cost  of  infrastructure,  a  major  differentiator  in  favour  of 
Galileo should be in its value added, i.e. its integrity 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  specific  national  environment  determining  the 
structure of the road network and the ownership of the roads102.  

It is not absolutely certain that the need to reduce 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 technologies. At first sight, there is no clear-cut or 
compelling  reason  justifying  a  systematic  resort  to  GNSS  based  solutions,  each  case  being 
assessed on its own merits in the 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  necessity  to  increase  the  fluidity  of  road  traffic103, 
especially  for  trucks,  and  by  environmental  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,  achieving  the  European  initiative  in  favour  of 
interoperability  should  incite  to  use  the  most  widespread  system,  or  that  of  the  leading  EU 
economy.  

Sunk costs are start up costs that cannot be recovered if the business project fails. 

101  
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.   

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However, under the principle of technological and  thus market neutrality, no  EC legislation 
can  clearly  impose  the  resort  to  GNSS  solutions,  provided  that  the  objectives  (e.g.  a  single 
invoice) are met. Directive 2004/52/EC, in this regard, consistent with this principle, mentions 
GNSS-based  solutions  among  other  alternative  possibilities  and  thus  gives  no  particular 
support to those solutions.   Moreover,  since  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 forecasts 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  standards,  and  privacy  issues.  However,  uptake  is 
expected  to  accelerate  if,  for  example  fragmentation  and  lack  of  harmonisation  problems  at 
European level are addressed in the years to come.  

Most GPS vendors are only active in a limited number of market segments, such as in-vehicle 
navigation and vehicle tracking. Garmin and Trimble are the main vendors that have designed 
products for a wide range of applications and segments. Garmin is active in a large number of 
consumer  segments  such  as  in-vehicle  navigation,  marine,  recreational,  aviation,  animal 
tracking, and communication.  

Trimble is the main vendor of industrial applications such as machine control, surveying and 
mapping, vehicle tracking, timing, and military. Both companies have been very successful in 
leveraging their broad engineering and manufacturing skills, including 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.  

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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 Agency, repealing Council Regulation (EC) 
N° 1321/2004 on the establishment of structures for the management of the European Satellite 
Radio Navigation programmes and amending Regulation (EC) No 683/2008 of the European 
Parliament and the Council  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 the European satellite navigation programmes 
(EGNOS and Galileo)  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 structures for the management of the European 
satellite radio-navigation programmes  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.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/LexUriServ.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/LexUriServ.do?uri=OJ:L:2002:138:0001:0008:EN:PDF  

Council resolutions and decisions 

2011 – Council conclusions on the Report from the Commission to the European 
Parliament and the Council Mid-term review of the European satellite radio navigation 
programmes, 3080th Transport, Telecommunications and Energy Council meeting Brussels, 
31 March 2011 
http://register.consilium.europa.eu/pdf/en/11/st08/st08395.en11.pdf  

2007 –Council Conclusions on launching the European Global Navigation Satellite 
System Programmes, 2835th Transport, Telecommunications and Energy Council meeting , 
Brussels, 29-30 November/3 December 2007 
http://register.consilium.europa.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.europa.eu/pdf/en/07/st10/st10126.en07.pdf 

2006 – Council Conclusions on the progress of the GALILEO programme - 2754th 
Transport, Telecommunications and Energy Council meeting Luxembourg, 12 October 2006 
http://register.consilium.europa.eu/pdf/en/06/st13/st13496.en06.pdf 

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2004 – Council Decision 2004/578/EC of 29 April 2004 on the conclusion of the Framework 
Agreement between the European Community and the European Space Agency 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.do?uri=OJ:L:2004:246:0030:0031:EN:PDF 

2004 – Council Conclusions on the European Global Navigation Satellite System (GNSS) 
- Transport, Telecommunications and Energy Council meeting, 11 June 2004 
http://register.consilium.europa.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.europa.eu/pdf/en/02/st15/st15121.en02.pdf 

2001 – Council Resolution of 5 April 2001 on Galileo 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 Journal L 194 of 10.7.1998] 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.do?uri=OJ:C:2008:074E:0752:0753:EN:PDF 

Commission communication, decisions 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 European satellite radio navigation programmes 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.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/LexUriServ.do?uri=COM:2009:0302:FIN:EN:PDF 

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2007 – Communication from the Commission n° 534 to the European Parliament and the 
Council on progressing Galileo: re-profiling the European GNSS programmes 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 implementation of the European GNSS programmes 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.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/LexUriServ.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 satellite radio navigation programme  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 research programme as at the beginning of 2004 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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 programme in the Galileo programme 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.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/LexUriServ.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&lang=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 programmes and on future challenges pursuant 
to Article 22 of Regulation (EC) No 683/2008 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0302:FIN:EN:PDF  

Commission decisions 

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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/LexUriServ.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/LexUriServ.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 Satellite Radio-navigation Programmes 

2008 – Commission Decision C(2008)8371 of 12 December 2008 adopting the 2008 Work 
Programme of the European satellite radio-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/LexUriServ.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 (GNSS) between the European Community and its 
Member States, and the State of Israel 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2004:0286:FIN:EN:PDF 

Korea 

2006 – Cooperation agreement on a Civil Global 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/LexUriServ.do?uri=OJ:L:2006:288:0031:0042:EN:PDF 

2006 – Council Decision of 1 September 2006 on the signing, on behalf of the Community, of 
the Cooperation Agreement on a Civil Global Navigation Satellite System (GNSS) between 

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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/LexUriServ.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 (GNSS) between the European Community and its 
Member States and the Republic of Korea 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2006:0141:FIN:EN:PDF 

Morocco 

2006 – Proposal for a Council Decision on the signing 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/LexUriServ.do?uri=COM:2006:0220:FIN:EN:PDF 

Norway 

2010 – Cooperation Agreement on Satellite Navigation between the European Union and its 
Member States and the Kingdom of Norway 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:283:0012:0020:EN:PDF 

2010 – Council Decision of 11 March 2010 on the signing and provisional application of the 
Cooperation Agreement on Satellite Navigation between the European Union and its Member 
States and the Kingdom of Norway 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.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/LexUriServ.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 (GNSS) between the European Community and its 
Member States and Ukraine 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0350:FIN:EN:PDF 

US 

2004 – Signature of EU/US Agreement: Agreement on the promotion, provision and use of 
Galileo and GPS satellite-based navigation systems and related applications 
http://ec.europa.eu/enterprise/policies/satnav/galileo/files/2004_06_21_eu_us_agreement_en.
pdf 

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Other publications 

Galileo 

–  Brochure on Europe's Satellite Navigation Programmes - Galileo and EGNOS 

http://ec.europa.eu/enterprise/policies/satnav/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/galileo/files/brochures-leaflets/galileo-os-sis-
icd_en.pdf 

–  Galileo, EGNOS and GMES 

http://ec.europa.eu/enterprise/policies/satnav/galileo/files/brochures-leaflets/galileo-
egnos-gmes-brochure_en.pdf 

–  GNSS applications 

http://ec.europa.eu/enterprise/policies/satnav/galileo/files/brochures-leaflets/applications-
leaflet_en.pdf 

–  Key results of the sixth research framework 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/enterprise/policies/satnav/galileo/files/ip-10-1301-prs_en.pdf 

–  Press release "New funding for the trans-European energy and transport networks, Galileo 

and Marco Polo from 2007 to 2013"  

EGNOS 

–  EGNOS Service Definition Document – Safety of Life 

http://ec.europa.eu/enterprise/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/enterprise/policies/satnav/egnos/files/cnes-user-guide-egnos-
2009_en.pdf 

–  Leaflet EGNOS for Agriculture 

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/egnos_agriculture.pdf 

–  Leaflet EGNOS for Aviation 

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/2009_egnos_aviation_leaflet.pdf 

–  Leaflet EGNOS for Road User Charging 

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/egnos-road-leaflet-gsa_en.pdf 

–  Leaflet EGNOS for Mapping 

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/egnos-for-mapping-flyer_en.pdf 

–  General EGNOS leaflet 

http://ec.europa.eu/enterprise/policies/satnav/index_en.htm 

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–  General EGNOS brochure 

http://ec.europa.eu/enterprise/policies/satnav/egnos/files/brochures-leaflets/egnos-
brochure_en.pdf 

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ANNEX VI: GNSS MARKET MONITORING AND FORECASTING TOOL: METHODOLOGY 

The  GNSS  Market  Monitoring  and  Forecasting  Process  (hereafter  MMFP)  provides 
understanding  of  today's  GNSS  market  and  forecasts  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 downstream market segments: location based services (LBS), 
aviation, agriculture and road transport (extension to maritime and mapping planned in 
future); 

−  measure the impact of the GNSS programmes and action plans in terms of economic 

and public benefits; 

−  provide  a  tool  to  support  policy  decisions  by  responding  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  highly  qualified  economic  and  business  consulting 
partners  and  involved  experts  from  all  user  segments.  Data  is  based  on  recognised  reliable 
primary public sources and grouped by application and by region which enables more detailed 
analysis.   Assumptions are based  on experts’  consensus. In the data gathering process more 
than  80  public  databases  and  reports  were  consulted  and  more  than  20  experts  interviewed. 
The tool is flexible and the European GNSS agency 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 GNSS market, identifying geographical 
opportunities  and  key  segments  for  the  European  industry.  It  is  using  a  selection  of 
econometric methodologies, based on availability 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  impact  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 

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These  two  models  in  combination  with  additional  analysis  were  used  for  calculating  the 
indirect benefits summarised in chapter 6.1.1.2:  

The total indirect benefits are equal to the sum of benefits generated in three sources:  

•  downstream market growth,  
•  upstream market and spill over, 
•  public utility (also referred to as social and environmental benefits or public benefits). 

referred to as economic 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 calculated 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 level and finally to the GNSS market level. In 
the  Market  Model  applications  from  the  following  4  sectors  are  taken  into  account:  LBS, 
road, aviation and agriculture.  
The  GNSS  revenues  are  the  product  of  shipments  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 introduction 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, leading 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 will be attributed to Galileo. 
This share is called Galileo delta in MMFP. The deltas are defined based on value added of 
EGNOS/Galileo  in  the  following  dimensions  (characteristics  of  GNSS  network):  accuracy, 
availability, indoor penetration, authentication, integrity and EU independence. 

The  model  is  based  on  validated  input  data  and  assumptions,  both  global  (equal  for  all 
sectors) and sector-specific (see Figure 11 and Figure 12 for details).   

MM segment  
Smartphones  
Smartphones  

Assumption  
Share of full device price attributable to LBS  
Share of LBS data revenue in total smartphone data 
revenue  
Monthly data ARPU for Europe in 2011  
Peak monthly data ARPU for Europe (in 2020) 
Monthly data ARPU for N. America in 2011  
Peak monthly data ARPU for N. America (in 2020) 
Monthly data ARPU for ROW in 2011  
Peak monthly data ARPU for ROW (in 2020) 

Smartphones  
Smartphones  
Smartphones  
Smartphones  
Smartphones  
Smartphones  
People tracking devices   Addressable market percentage  
People tracking devices   GNSS peak stock penetration  
People tracking devices   Year GNSS peak stock penetration is reached  
People tracking devices   Galileo peak stock penetration  
People tracking devices 
People tracking devices   EGNOS peak stock penetration  
People tracking devices   Lifetime of a people tracking device  

Year Galileo peak stock penetration is reached  

Value  
1%  
2.5%  

Source  
Helios validation  
Helios validation  

Helios validation  
€10  
Helios validation  
€20  
Helios validation  
€5  
Helios validation  
€15  
Helios validation  
€1  
Helios validation  
€5  
LE analysis 
30%  
LE analysis 
50%  
LE analysis 
2035  
LE analysis  
40%  
LE analysis  
2040  
40%  
LE analysis  
5 years   LE analysis  

Figure 11: List of sector-specific assumptions used in MMFP (example of LBS sector). 

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Global Assumptions (MMFP) 
Units  
Assumption name  
Average EU VAT (%)  
%  
Average EU Corporation tax rate (%)   %  
%  
Average '05-'07 earning/revenue ratio 
(%): Manufacturer of communication 
equipment - services  
Average '05-'07 earning/revenue ratio 
(%): 
Telecommunications 
companies– devices  
Average EU 27 inflation rate  
$  to  €  Exchange  rate  conversion 
factor  
Price  elasticity  to  offer  reduction 
(price  elasticity  to  a  decrease  in  oil 
production)  
Statistical value of a life (mean)  

%  
#.##  

#.##  

€m  

%  

Value  
19.50%  
23.20%  
12.7%  

Source  
Eurostat  
Eurostat  
Amadeus database  

14.1%  

Amadeus database  

1.6%  
0.82  

Eurostat  
OANDA  

5.00  

VVA estimate on EIA data  

2.0  

Value of CO2 (per tonne)  

€/tCO2   22.50  

leisure 

Average  hourly  salary  (All  NACE 
activities (except agriculture; fishing; 
activities  of  households  and  extra-
territorial organizations))  
Value 
of 
Proposed  amendment 
estimate of 50% of salary.  
Real  Economic  Growth  (Percentage 
change 
in  Trend  GDP,  constant 
prices):  
- Europe  
- North America  
- Rest of World  

time 
from  VVA 

€/hour  

€/hour  

%  

17.71 
(2006,  to 
be 
indexed)  
33% 
of 
salary  

1.17%  
1.72%  
6.31%  

European  Commission  (2009)  PART  III: 
ANNEXES 
IMPACT 
TO 
ASSESSMENT 
GUIDELINES, 
http://ec.europa.eu/governance/impact/co
mmission_guidelines/docs/iag_2009_ann
ex_en.pdf.  
ICE  ECX  EUA  Futures  (Dec  2020), 
European 
Exchange 
Climate 
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.  
Eurostat  –  Hourly  labour  costs  -  Nace 
Rev. 
1.1 (lc_an_costh): 
http://epp.eurostat.ec.europa.eu/portal/pa
ge/portal/statistics/search_database#  
World  Bank  (2005)  Valuation  of  Time 
Savings (TRN-15).  

DG-ECFIN 

EC 
AMECO 
http://ec.europa.eu/economy_finance/ame
co/user;  IMF  World  Economic  Outlook 
Database, 
http://www.imf.org/external/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  infrastructure  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;  

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•  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  economy.  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  spending  occurs  relatively  early  in  the 
programme.  

Calculation of upstream market growth and spill over is a separate analysis, not included in 
MMFP. 

Indirect social and environmental benefits 

The public benefits for EU-27 region were calculated based 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 institutions (VAT, corporate tax) 
o  benefits for users (time savings, fertilizer reduction) 
o  benefits for society (CO2 reduction, noise reduction) 

Those  benefits  have  been  firstly  calculated  for  the  network  of  all  available  GNSSs  and 
secondly  a  certain  share  of  total  GNSS  benefits  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:  accuracy,  availability,  indoor  penetration, 
authentication, integrity and EU independence. 

The  calculation  of  public  benefits  is  robust  and  focuses  on  externalities  with  clear  link  to 
GNSS  use.  Figure  13  presents  examples  of  public  benefits  defined  for  road  transport.  An 
example  of  calculation  of  time  savings  in  road  (benefit  of  highest  value  in  MMFP)  is 
presented on Figure 14. 

Public benefits  

Benefits for users 

Travel time reduction 

Fuel consumption reduction 

Social benefits/externalities 

Air pollution reduction 

Climate change (less Co2) 

GNSS applications defined for road transport 

Navigation 

RUC 

PPUI 

ADAS 

eCall 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

Severity decrease in injuries/accidents 

Congestion reduction from avoided accidents 

Saved lives 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

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New jobs 

Benefits for public institutions 

∆ VAT 

∆ Corporation tax 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

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 defined with sectoral experts and the calculation 
was based on validated assumptions (see Figure 6 for more details). 

Value   Source  
10% 

VVA 

% of urban kilometres travelled by private cars  75% 

Assumption  
% of km driven in urban areas 

PUM benefit  
Fuel  consumption  &  Air 
pollution & CO2 emissions 
Fuel  consumption  &  Air 
pollution & CO2 emissions 
Fuel  consumption  &  Air 
pollution & CO2 emissions 
Air pollution 
Time savings for pedestrians  Time spent walking per person per day (hours)  0.30 
50% 
Time savings for pedestrians  % of walking in urban areas 
0.5% 
Time savings for pedestrians  %  of  walking  where  smartphone  is  used  for 

% modal shift from cars to public transport 

Air pollution (€/1000 Vehicle-Km) 

2% 

13 

Value of lives saved 
Value of lives saved 
All  

navigation 
Fatalities reduced to severe injuries (%) 
Avoided deaths (%) 
Share of smartphones which are 2nd devices  

0.1% 
0.1% 
5%  by 
2021  

VVA 

VVA 

VVA 
LE analysis 
LE analysis 
LE analysis 

LE analysis 
LE analysis 
LE analysis 

Figure 15: List of assumptions used in Public Utility Model (example of LBS sector). 

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Benefits  such  as  lives  saved  and  water  savings  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 assessing the impact of different policy options.  

Non-monetized benefits: 

•  6,000 jobs (Net jobs creation from 2015-2027) 
•  8,500 saved lives (Cumulative until 2027) 
•  2,000,000 lives improved (Average from 2015-2027) 
•  1,2 trillion m³ of water saved (Cumulative until 2027) 

Public benefits in different launch scenarios 

The comparison between five different policy options for problem 1 presented in Table 4 was 
done by preparing five different scenarios in the MMFP. The simulation 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 based on GPS today (2009) 
•  Galileo is the 2nd GNSS in use after GPS 
•  Galileo is deployed according to current baseline in terms of features 

The  Galileo  delta  is  then  corrected  and  simulated  over  time  taking  into  account  GPS 
modernisation,  additional  GNSS  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,  Availability,  Integrity,  Signal 
tracking and indoor penetration, Authentication and EU independence. For each user segment, 
the features are weighted according to their importance. For a given year, Galileo is compared 
on each feature to the best available GNSS. This comparison takes into account the number of 
deployed  satellites  and  the  Galileo  services  available.  In  case  Galileo  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 providing 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. 

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 ANNEX VII – PERFORMANCE MAPS  

To give an example, below are the performance maps for Galileo horizontal accuracy for four 
options. Figure 4 represents option (4) where the 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 surface 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] 

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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  solutions  based  on  the  combined  use  of  satellite 
constellations in order to increase overall service performance and robustness. This message 
has  been  constant  over  the  last  few  years  and  the  trends  observed  in  the  on-going 
standardisation  processes  in  different  application  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  providers  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  based  on  an  apportionment  of  the  error  detection 
capability  between  the  GNSS  provider  and  the  user  receiver.  This  would  enable  to  reduce 
significantly  the  implementation  burden  for  the  Galileo  programme  while  still  offering 
interesting  operational  benefits  for  the  user  communities  when  using  more  than  one 
constellation. Under this scenario, a reduced level 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  mission  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 objectives with regard to Galileo SoL would 
then  be  documented  in  a  revised  version  of  the  High  Level  Document  (HLD)  and  Mission 
Requirement Document (MRD). 

Regarding the ground infrastructure, the main differences between B.2 and B.3 versions, the 
latest one supporting a standalone service 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  elements  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 perform the qualification of the system.  

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