Look! Up in the Sky!

They're ba-ack. The Soviets, that is.

Or rather, their Russian successors. On Tuesday, Russia launched the last three satellites needed to complete its Global Navigation Satellite System (GLONASS). A revitalization of the Soviets' creaky old Cicada system, which dated from 1976 and had fallen into disrepair along with the rest of the empire, GLONASS represents President Vladimir Putin's latest effort to rebuild the old Soviet military machine -- and potentially boost Russia's consumer electronics industry along with it.

Tuesday's launch brings the number of orbiting GLONASS satellites to 18, sufficient to provide state-controlled GPS coverage over all of Russia, but six short of the number needed to cover the entire globe. Russia aims to put the next half-dozen up by 2010.

That's nice. What's it got to do with investing?
There are several investing angles to this story. A few of them are red herrings, however. For one thing, I doubt very much that GLONASS poses a threat to Garmin's (Nasdaq: GRMN) GPS device supremacy in the U.S., or to TomTom's hegemony in Europe. In fact, because Putin has ordered that GLONASS' standard precision signals should be open to civilian use, GLONASS might be useful to these companies. But it's estimated to be only about 25% as accurate as the GPS' civilian band, so maybe not.

GLONASS' primary significance is akin to that of the Galileo GPS being developed by the European Union. It's partly a vanity project to demonstrate "We can do this, too."

It's also partly a declaration of independence from the American GPS monopoly. No one wants to have to depend on a potential rival's system in the event of a conflict -- not Saddam Hussein's Iraq, which had its civilian GPS signals cut off on the eve of war several years ago. Not our European allies, either. And certainly not Czar Putin.

But by extension, the fact that GLONASS and Galileo aren't exactly necessary, that they're set up as a challenge to America's GPS, suggests that the real story here is one of opportunity for U.S. defense contractors. With competing systems soon to be in place, the U.S. government may feel inclined to maintain the advantage of its system by building more, and more sophisticated, satellites.

Such a trend, if it comes about, would benefit satellite builders Boeing (NYSE: BA) and Lockheed (NYSE: LMT), along with similar space-race companies such as United Technologies (NYSE: UTX) and Orbital Sciences (NYSE: ORB).

One thing's for sure, though: We're not alone anymore.

Believe it or not, the Fool is your source for investing and space (investing). See:

• Frogs in Space  
• Turn On Your Space Radar

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