Europe's Galileo navigation system will become operational by 2008, with the first satellites launching next year, according to the European Commission.

EU transport ministers gave the green light for Europe's equivalent to the US-owned Global Positioning System last week, approving plans to make Galileo the global standard for the civil satellite navigation market, estimated by the Commission to be worth Eur300bn by 2020.

The Galileo Joint Undertaking (GJU), set up by the Commission and the European Space Agency, will now select a private sector consortium before February, who will part fund the £3.2bn project, launch satellites and build ground receiving stations.

Thirty satellites will be launched in three orbits providing highly accurate positioning for products and services in the transport, telecommunications, fisheries, agriculture, construction and defence sectors.

'We are now on the home straight: next year will see the launch of the first satellites,' said Jacques Barrot, vice-president of the Commission. 'Galileo will be as much of a technological revolution as mobile telephony.'

The GJU will now chose between the two remaining consortia - iNavSat and the Eurely consortium - with negotiations heavily focused on financial investment (Computing, 25 November).

The successful consortium is set to profit by developing a range of new satellite navigation products, including location-based services, telematics, road transport systems and safety products.

'Both bids were very similar, so we are now in the second negotiation stage, which started mid-November, that will be mainly based on financial investment,' a spokesman for the GJU told Computing. 'We hope to make a decision by the end of January.'

Total costs for the development stage of the project, which will run until 2006, are estimated to run to Eur1.1bn, while Eur2.1bn is needed for the deployment stage (2006 - 2008), with the private sector expected to fund two-thirds of the investment.

The public sector will make an 'exceptional contribution' of Eur500m for the first few years of the exploitation period, with the private sector fully funding costs thereafter.