Charging policies and mechanism for GALILEO
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Charging policies and mechanism for GALILEO
It is expected that the charging policies for the usage of GALILEO will form a central part of the tenders for the GALILEO operating company.
How will these policies impact on the uptake of GALILEO and the European GNSS industries in general?
It is to be expected that GPS will be the most prominent competitor of the GALILEO system. Although GPS has been operational since the
1980s, it has been constantly modernised. In parallel with the establishment of the GALILEO services, GPS will undergo a complete modernisation.
In particular, new frequencies with higher output power and, thus, greater signal availability will be added. This will make GPS a very competitive
stand-alone system that will not require the augmentation through GALILEO. In addition, it has been mandated by the US President that
GPS can be used free-of-charge by all civilian users.
In contrast, GALILEO will charge for certain services, especially where added values are perceived. However, due to the fact that GALILEO is
still in an early phase of its development, it was impossible to widely communicate which added value services will be available. Although there
will also be free services on GALILEO, it has been suggested by PWC that a royalty of roughly €0.50 should be levied on every GALILEO chipset.
If it is assumed that a GPS as well as a GALILEO chip-set will have a market price of roughly €5.00 in 2008, a €0.50 royalty would mean a
10% penalty on every GALILEO chip-set.
Furthermore, it is still not clear whether GALILEO chip-sets will be automatically GPS compatible. Indeed, it has to be assumed that – due to
increased complexity – there will be an additional penalty on combined GPS/ GALILEO chip-sets. To date, it is not clear if the increased signal
availability in a combined GPS/ GALILEO chip-set will warrant the increased chip-set cost caused by both the increased complexity, as well as
the charging policies. [1]
References
[1] G.Dippel-Hens (GALILEAN working group report)
"GNSS business issues".
