The European Union set the date on Monday for the launch of the first satellites in its Galileo global navigation system and said the long-delayed program would come in below budget.

Two Galileo satellites, which will compete with the U.S. global positioning system once the project is completed by 2019, will be launched from French Guiana on October 20, the European commissioner for industry said as he talked up the benefits of a program long criticized for its spiraling costs.

This launch is of historical importance, Antonio Tajani said of a plan that will eventually put 30 satellites into orbit and provide global positioning data for cars, ships, aircraft, railroads and mobile phone users, among others.

We are cutting the costs as compared to the estimates, Tajani said, saying the forecast figure of 3.4 billion euros ($4.76 billion) would be lowered once the price of the last two contracts is finalized at Le Bourget in Paris on June 22.

The program, which must be fully funded by the EU, has long run over budget, with the European Commission saying in January it needed 1.9 billion euros more to complete the program. That request has now been dropped.

Some officials have called into question the point of Europe developing its own satellite navigation system when a U.S. one is already widely used and accepted. But Tajani said it was critical for the development of European entrepreneurship.

Innovators across Europe will be able to spot business opportunities and create and develop their products based on the future Galileo infrastructure, he said.

BOOST TO EU ECONOMY

Once fully implemented, the program is expected to cost 800 million euros a year to operate, according to Jean-Jacques Dordain, the director general of the European Space Agency, which has been working on Galileo for a decade.

That figure includes the cost of replacement satellites, he said, and is comparable to competing networks.

(In the United States) they also have 30 satellites in their system, and the operational cost is $1 billion a year for the entire constellation, Dordain said.

Galileo is expected to deliver 60 billion euros to the European economy over 20 years, the European Commission has said, as well as removing the cost of relying on other systems. But experts have questioned whether the system can deliver all the benefits and cost savings that its planners envisage.

Galileo will be civilian- rather than military-controlled and will provide initial services from 2014/15, once a constellation of 18 satellites is in orbit, planners say.

After the October launch, two more satellites will follow six months later and an additional 14 by the beginning of 2013.

(Writing by Alysha Love, editing by Paul Casciato)

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