BERLIN GNSS TELEMATICS CONFERENCE: GALILEO FEELING

UNCLAS BERLIN 000897 SENSITIVE SIPDIS, STATE FOR EUR/AGS, EUR/ERA AND EB/IFD/OMA E.O. 12958: N/A TAGS: EAIR ECON EINV ETRD PGOV PREL TSPA EUN NL GM SUBJECT: BERLIN GNSS TELEMATICS CONFERENCE: GALILEO FEELING THE 2013 HEAT REF: A. 07 MUNICH 652 ¶B. BERLIN 142 ¶C. BRUSSELS 310 ¶D. BERLIN 247 ¶E. BERLIN 264 ¶1. (SBU) The 2nd GNSS Technologies and Telematic Applications Conference, held June 12, 2008, highlighted a paradigm shift in Galileo's business philosophy to generate revenue and openness to foreign procurement. Galileo representatives admitted that the goal of having a complete and operational Galileo satellite constellation by 2013 is "very ambitious". They also expressed concern regarding EU/Chinese GNSS (Global Navigation Satellite System) cooperation. GALILEO BUSINESS PLAN FOCUSING ON DOWNSTREAM REVENUE -------------- -------------- ¶2. (SBU) Mr. Rainer Grohe, former Head of Galileo Joint Undertaking, and Mr. Carlo des Dorides, Head of Programs Department EU GNSS Supervisory Authority (GSA),both commented that industry feedback projects the Galileo commercial signal will not be a significant source of revenue. Rather, Galileo management is now focusing on the downstream economic stimulus Galileo that will provide as a primary revenue source. Grohe said the EU GNSS market expansion resulting from the Galileo signal is now expected to exceed 140,000 EU jobs and stated there is no indication that a market exists for an encrypted commercial service (CS) signal. Grohe said the original Galileo driving force of EU/GPS independence is now "ridiculous" and that Galileo's success rests on user application services. GALILEO OPENING PROCUREMENT TO CONTRACTORS OUTSIDE THE EU -------------- -------------- ¶3. (SBU) The GSA has softened its position on Galileo-related contracts being awarded exclusively within the EU. Dorides commented privately that in the interest of keeping the Galileo schedule on track, the GSA has adopted a more flexible posture, allowing contracts to be awarded on a subcontractor basis (not as a primary bidder) outside the EU. Dorides specifically noted that using US contractors with ample satellite experience would be a likely scenario. The German newspaper Handelsblatt reported on Monday June 16 that the US aerospace group Boeing is taking part in discussions with a view towards eventually participating in the Galileo project. GALILEO AND COMPASS ON A FREQUENCY COLLISION COURSE -------------- -------------- ¶4. (SBU) China's GNSS candidate (Compass) and the EU's (Galileo) are playing a game of chicken over the issue of frequency filings, and dialogue and negotiations to resolve this matter have been thus far unsuccessful. (COMMENT: The current Chinese frequency selection would overlay on Galileo's encrypted Public Regulated Service (PRS) and would potentially limit the EU's options when it comes to NAVWAR situations. END COMMENT.) Grohe commented that there has been no resolution yet on the frequency overlap issue, adding that China is "playing a real game of hardball" on this issue and they are "not backing down." In addition, Grohe commented on the EU perception that China's interest in Galileo is largely based a thirst to attain access to the core Galileo technologies. According to Grohe, China's interest in Galileo is motivated by their goal of siphoning EU satellite technologies to speed up their own R&D process in constructing Compass. Grohe added, the EU position is not necessarily to disallow Chinese participation in Galileo, but rather to ensure that their participation is limited to an external role (denying Chinese access to core Galileo technologies such as Galileo's atomic clock). POLITICAL PRESSURE THE REAL DRIVING FORCE BEHIND GALILEO -------------- -------------- ¶5. (SBU) On the margins of the conference, Dr. Paolo Mulassano, a GNSS researcher at the Instituto Superiore Mario Boell - Italy, told Global Affairs officer the real drive behind Galileo is political and not the result of a private industry need for a second GNSS signal. Mulassano welcomed the presence of a second viable GNSS signal, but added that it is questionable whether Galileo's investment cost is worth it. Mulassano added, the 3.4 billion euro price tag is essentially the cost to prove the EU can successfully collaborate on a technical project on the scale of Galileo. TIMKEN JR