Galileo is being designed to be a global civil satellite-based navigation system under European civil control. It is to be independent from, but compatible with, existing satellite systems (GPS and GLONASS). It will provide a number of services to users (e.g. aviation, land and maritime) equipped with Galileo receivers by means of the Galileo Signal in Space (SIS).
The Galileo European Multimodal Integrated Navigation User Service (GEMINUS) study is defining the navigation and navigation-related communications services provided by Galileo, and will therefore be the primary work from which the Galileo Architecture (GALA) definition activities will flow.
The Operator’s Requirement workpackage, as an integral part of the GEMINUS study, describes the GVC internal organisation that is derived from Business models, Market Sizing and Market Requirement Analysis. The GVC defined in this report should be the company created to operate the Galileo services from the inception of the Galileo programme. It is anticipated that this Operator’s Requirement work will also assist the EC in its decision to allow the continued development of the Galileo programme.
Internal environment, which describes the activities, the assets and the legal organisation of the GVC
- Infrastructure Requirement, which defines the internal operational organisation of the company and estimates its running costs.
- PPP environment which will propose a financial scheme of the GVC involving both private and public partners
- Business of EGNOS transition, which will propose a business scenario to integrate EGNOS into Galileo.
The aims of GEMINUS were therefore to:
To define the Galileo Service.
- To define the business structure for the Galileo Operator which meets the requirements of both the EC and the Provider Consortium.
- To validate the study with Case Studies which will examine many levels of the service provision value chain. 1.2.3 As a consequence GEMINUS has:
- developed an understanding of user requirements through validation of the GALA WP1 work
- obtained a view on market size and willingness to pay in those markets
- defined a set of services which are as close as technically possible to the user requirement
- determined the levels of revenue possible from the proposed services
- developed legal views on the feasibility of certain differentiators (e.g. service guarantees/liability) and the optimal structure of the Galileo Vehicle Company (GVC) to make it attractive to private investors and their backers
- determined the mission of the GVC
- conducted a risk and financial analysis of the GVC ventur
- proposed a potential PPP approach
- confirmed the revenue prospects for the GVC through a number of case studies
- confirmed that the GEMINUS view of the commercial opportunities for Galileo are not in conflict with views expressed in other studies and are not affected by any significant omissions.
It was recommended that the GVC provide the following services using the combined Galileo/EGNOS infrastructure:
- Global Open Access Service (OAS) - meets public requirement for basic free of charge service - matches or improves on GPSIII
- Regional Safety Service (RSS) - commercial safety service, unencrypted and charged for through institutional means rather than direct user charges - meets needs of aviation over Europe as a minimum, highest performance service offered by the GVC - based on EGNOS "Mission 2"
- Regional Navigation Related Communications Service (NRS) -commercial position reporting mechanism over Europe, serving users who spend some or all of time in rural areas where terrestrial means are inadequate
- Augmentation of GPS - continuation of EGNOS
- Timing Service - The basic navigation and time signal dissemination services would be made available free of charge and without discrimination, although enhanced service capability may be chargeable with enhanced integrated systems.
- Local Area Augmentation Services (LAAS) - Local Area Augmentation Services, including services at metric and centimetric levels and real-time kinematic services, should be provided by local value added service providers, as the markets will demand. Because of the potential for many types of such services and the potential high cost of the infrastructures, they should not be provided by the GVC.
- It is important that these services are compatible with GPS to the greatest extent possible, as many applications will achieve maximum benefit from the launch of Galileo through the use of GPS-Galileo combined receivers. To satisfy further public requirements, it is also anticipated that the GVC will be asked to operate two further services:
- Government Access Service (GAS) - a service to which access will be controlled by governments, anticipated to be used by emergency services personnel, but not the military. The requirement for this service is not yet fully defined.
- Enhanced COSPAS-SARSAT search and rescue (SAR) capability – a service which will involve passing emergency calls received to COSPAS-SARSAT agencies.
At the tim
EGNOS has evolved from an aviation to a multi modal system. The direction of EU thinking has historically been to see EGNOS and its successor, Galileo, as revenuegenerating systems. In this light they must compete in the market place.
The GEMINUS Study comprehensively analysed the potential EGNOS markets to evaluate commercial prospects. One of the analyses used is the ‘PARTS’ analysis. Players, Added value, Rules, Tactics, Scope analysis is a tool that allows business scenarios to be investigated and challenged systematically to identify opportunities to increase the overall value added and the proportion of the value captured by the EVC. PARTS analysis is supported by the value net, which is a tool that maps interdependencies on two axes:
- Customers and suppliers are represented on the vertical axis
- Collaborators or complementors (organisations that provide complementary resources to the customer) and competitors or substitutors (competitive organisations from whom the customer can purchase) are represented on the horizontal axis.
The value net framework identifies each participant that contributes to customer value (i.e. players in the game) and maps their interdependencies to understand who is adding value and how. Mapping the interdependencies also provides a baseline for understanding value creation strategies.
ESA, EC and member states (possibly through various agencies) own and control the GA company ( which can have a private status) that is in charge of overall co-ordination, allocation of responsibilities and fund management for the system development / validation phase.
It is subcontracting the system development to selected prime contractors. These contracts can be established on fixed price basis, thus shifting the development risk to the prime contractors, or, alternatively, on a cost plus basis hence retaining the development risk.
The GA appoints the system architect (system architect role could be devoted to the GVC. The system architect is in charge of the industrial co-ordination between prime contractors and industrial partners. In addition, he is responsible for the overall relationship with the application providers and ensures that the program development follows the market needs. In the PFI scheme this role would be effectively devoted to the GVC, but a system architect structure could be set-up in the initial stages of the project.
The GVC acts as commercial entity in charge of selling the Galileo services to the various service providers. It benefits from a concession including a service level guarantee provided by the GA. It takes the responsibility of the deployment of the system (including financing), against the guarantee of services payment. As an option, it can, in the frame of a selective private investment, sell the commercialisation of the NRS services to a Specific Segment Company (SSC). The GVC temporarily owns the system and has the system usage right for the duration of the concession contract .The SSC would be a special purpose company registered in a jurisdiction that is appropriate from a legal and taxation point of view and would be owned by private investors. A public guarantee in respect of the services to be commercialised by the SSC should be set up. This is a key feature without which private investors would be unlikely to be willing to join a structure independent from the GVC.
The SSC would have acquired a concession (based on frequency usage) to commercialise the Galileo based NRS services for a defined period of time (for example: 15 years). In exchange, the private investors will invest an amount corresponding to their SSC’s share of the expected cash-flow from SSC’s commercial operation. It is understood that the PPP structure i