Europe’s satellite business needs to find correct orbit

Date: 03/09/1998

By Chris Johnstone

LOCATION is everything, according to estate agents.

For the European Commission and European companies, it beckons as a multi-billion-ecu business of the future as satellite navigation systems invade almost every aspect of life.

The range of uses to which they can be put is vast, from telling golfers how far away the hole is to guiding cars out of congestion black spots.

Some of these applications are already on offer, but many others which demand pinpoint accuracy are waiting for more sophisticated systems in the sky.

At the moment, satellite navigation is like a singles holiday for Europe: it knows where it wants to be, has the technology to get there, but does not know who it wants to go with.

Partnerships with the US and Russia, which each developed their own rudimentary military systems during the Cold War, are being explored. Capacity on these systems will not be able to provide the accuracy and reliability needed by the broad range of future uses.

The stakes are high, especially for the consumer electronics industry. Hundreds of consumer applications for satellite navigation have been opened up by the 300-fold drop in the price of global positioning receivers over the past 15 years. Receivers now sell for around 300 ecu, with further falls in the price expected.

Industry analysts predict that the total world market for satellite equipment will expand to around 50-100 billion ecu over the next 15 years, up from some 5 billion ecu now. The worry for Europe is that it could be frozen out of this promised market for navigation gadgets.

"It is estimated that 95% of this market will be in the applications and 5% will be in the equipment in space," said a Commission source. "If Europe is not on board developing the system, then there is concern that industry will not be given the technical details to develop the applications."

Each partnership option has its costs. The US told European officials at the end of July that they could join it in taking the next step beyond its Global Positioning System (GPS), as long as the EU accepted American leadership and its technology as the world standard.

The US system is making a slow transition from military to civilian use, in the face of bitter opposition from the defence department, with control a sensitive issue.

Europe is reluctant to go down the US path, and claims to have some trump cards in its hand in the shape of frequencies necessary for its system to work.

Moscow is offering Europe the chance of a more equal partnership in developing its Glonass system, with the price being a large cash injection into its ailing space programme.

"Its system is in real difficulty. It has a real need for partners," said a source.

Russia has already warned that without more funds, it will have to postpone some of the satellite launches needed to complete its system.

EU officials have had two rounds of talks with US and Russian counterparts, and more meetings with each are planned for the autumn. However, Moscow and Washington are also involved in talks, raising concerns in Europe about a possible deal between the two.

The Commission wants to make up its mind about which way Europe should go by the end of the year, so that EU ministers can take a decision by the spring.

Russia appears to be the leading contender after these first encounters, but US observers claim there are question marks over whether it can deliver on its promises.

Daimler Benz' aerospace unit, Dornier Satellitensysteme GmbH, is working on one future navigation proposal with Russia's space agency, space control centre and companies which could give positioning accuracy to within two metres. This proposal, aimed at linking up with improved US and Russian systems, would directly create around 30,000 jobs, says Dornier Satellitensysteme.

The Commission is, however, encouraging all EU companies, including France's Alcatel and Alenia, to cooperate on some of the technology which will be needed for such an ambitious project, and has set a year-end target for them to report on progress.

A less attractive option would be for Europe to go it alone on the next generation of satellite navigation.

The price tag for the EU to get a piece of this future action by developing its own satellite navigation system is flexible at the moment, varying from around 400 million ecu for a fairly low technology solution with capacity borrowed on existing satellites to 1.5 billion ecu and more for an advanced system with dedicated satellites.

Europe is already taking a tentative step in this direction by boosting the performance of the existing Russian and US signals over Europe, Africa, the Middle East, and Central Asia with a network of ground stations and satellites.

The European Geostationary Navigation Overlay Service (EGNOS) should be in place and ready for use to guide aircraft on to runways by 1999, ahead of reaching its full operational capacity in 2002.

EGNOS will fill two key functions. First, it will be able to give an immediate warning within seconds of a satellite malfunction. This can take up to 15 minutes using current technology, a flaw which makes the system inapplicable for aircraft navigation. It will also allow navigation systems to pinpoint objects to within five to ten metres, instead of around 100 metres as at present.

The pay-off from this improvement should be a sharp cut in the minimum space needed between aircraft, easing the immediate threat of an airspace overload. The US, Japan and Russia plan parallel moves to develop a workable world-wide navigation system.

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