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UPDATE 1-EU puts second Galileo test satellite into orbit

(Adds comments from EU’s Barrot)

BRUSSELS, April 27 (Reuters) - The European Union launched the second and final test satellite for its $5.3-billion rival to the U.S. Global Positioning System on Sunday, brushing off industry doubts over its viability.

The Galileo project, Europe’s biggest single space programme, has been plagued by delays and squabbling over funding that ended only when the 27-nation EU agreed to funnel public funds into it.

The experimental satellite, Giove-B, was put into orbit by a Soyuz rocket in Kazakhstan and is due to test technologies for Galileo such as a high-precision atomic clock and the triple-channel transmission of navigation signals, the executive European Commission said in a statement.

“(The project) will be operational in 2013 and already we think this will be profitable,” EU Transport Commissioner Jacques Barrot told Reuters after monitoring the launch from the Fucino control centre in the hills of central Italy.

“We’re already working on putting its products and services on the market in 2013, so we really believe that starting at the operational phase of Galileo, this is a system that can be profitable.”

Galileo, whose first experimental satellite was launched in December 2005, has been plagued by doubts about its viability given the dominant position of the U.S. GPS and similar projects planned by Russia and China.

Critics have also labelled it too expensive, despite Commission arguments that it would create thousands of jobs and ensure independence from the U.S. service.

Barrot played down such concerns, however, saying the market for personal navigation devices was booming and the new system would appeal to a wide range of sectors ranging from transport to construction.

Russia and China are also interested in cooperating to develop some technology jointly, Barrot said.

The number of personal navigation devices sold last year jumped five-fold from 2005 and the European market is expected to be worth 135 billion euros by 2025, the EU says.

But private companies have been less enthusiastic about the project, and a consortium that included France's EADS EADS.PA and Thales TCFP.PA and Italy's Finmeccanica SIFI.MI pulled out of it last year over profitability concerns.

That forced the EU to agree to divert unused public funds to plug a 2.4-billion-euro shortfall.

EU transport ministers gave Galileo the final green light earlier this month, giving the European Parliament more say in how the project is run and allowing companies to tender for contracts worth billions of euros.

The 3.4-billion-euro project is due to have 30 satellites up and running by 2013. (Additional reporting by Deepa Babington in Fucino; Editing by Janet Lawrence)