The numerous services offered by the integration of GNSS (Global
Navigation Satellite Systems) into transport have a great potential for
improving transport efficiency, which is a key priority for the European
Union. Therefore, GNSS-based value-added services (VAS) have an important
role to play in the transport domain, where strong demand already exists
and the development of positioning systems based on Galileo seems
promising and may lead to a significant market for commercial
VAST aimed to evaluate the expected benefits of commercial application of
GNSS in transport, with an emphasis on road and multi-modal transport.
Specific objectives were to identify the main existing and future
commercial applications, assess their potential market, and propose and
assess cost recovery schemes and public private partnerships (PPP) models.
Three layers have been identified to structure VAS:
- satellite-based service enhancement (e.g. Galileo controlled access service);
- terrestrial enhancements (e.g. differential global positioning systems, GPS);
- an application layer (e.g. communication services).
A comprehensive database of more than 50 GNSS applications and their related VAS has been produced. A real need for Galileo controlled access service has been highlighted, due to the high integrity and service guarantee levels required for many applications.
The assessment of market players' behaviour has highlighted different positions regarding the opportunity to support the EU strategies of development: the pro-actives, the pragmatics and the passives. The different positions derive from different visions of the influence that will be exerted on the market by GPS and Galileo and from different levels of support for PPP.
The main drivers that are expected to influence the deployment of applications have been identified as:
- the price of applications - in the road market;
- universal availability - in the multi-modal and aviation sectors; r
- eliability - in the rail, maritime and air sectors.
Based on current average market prices, road transport is foreseen as the leading satellite navigation market in the coming years (40 billion Euros in 2020), followed by multi-modal (5 billion Euros), aviation (900 million Euros), rail (680 million Euros) and maritime (50 million Euros).
The development of Galileo has been estimated to be profitable for European end-users, based on a comparison of users' benefits, defined as the reduction of costs and/or the increase of profits by using satellite navigation applications, set against the initial and recurring costs.
From a financial point of view, only a fraction of the potential recoverable costs, equal to the increase of turnover by European industry from the sales of open access receivers and controlled access application equipment, will flow back to the investors in the form of a general levy. It is estimated that the tax income to the government from sales would be more than sufficient to recover the rest of the operational costs.
Based on the generic characteristics of PPP schemes, three Galileo PPP models have been selected and matched against the identified future payment and market structures, risk factors and financial mechanisms: joint ventures will be suitable for the design phase as risk factors are difficult to allocate ex-ante; share concession is suitable for the building phase as risks can be allocated, while the need for cash flow increases, no market revenues are generated and the need for public finance is substantial; 100% private concession is suitable for the operation phase as risks decrease and should be easy to allocate, market revenues increase, the need for public finance decreases and private investments increase.