Three groups of firms have been selected to compete for the contract to operate the European Union's Galileo geo-positioning satellite network.
The Eutelsat Consortium comprises space and satellite technology firms Eutelsat, Hispasat, Logica CMG and AENA. It will compete against the iNavSat Consortium which include EADS Space, Inmarsat Ventures and Thales, and the Vinci Concessions Consortium which includes Vinci Concessions, Alcatel and Finmeccanica.
All three said they are willing to finance two-thirds of the €2.2bn development project.
They were chosen partly on their ability to raise funding, but also on their commercial approach to running Galileo and their design plans for the satellite network, the commission said.
A consortium led by German space technology firm OHB System was dropped from the bidding because it failed to measure up to the standards promised by the three finalists.
"The preselection results are very encouraging," said European commissioner for transport Loyola de Palacio. "The quality of the three tenders selected augurs well for the competitive negotiation phase."
Galileo will be run by one private consortium, the European Commission and the European Space Agency.
The winning consortium will be responsible for the development phase, including the purchase of 30 satellites and the establishment of ground stations around the world.
The commission said preparation work should be completed by 2008, when the system is due to go live.
Galileo will lead to the development of a new generation of universal services in sectors such as telecommunications, transport and agriculture.
Unlike the US GPS and the Russian Glonass global positioning systems, Galileo is intended for civilian use.
Paul Meller writes for IDG News Service