"The price war has started due to the very heated competition," said Claude Sanchez, a spokesman for the French-led consortium Arianespace. Government financing for launch-industry players on either side of the Atlantic has become a major issue because of the increasingly tight international market.

And Arianespace managers have denounced the U.S. government's practice of charging only a fraction of the cost of using Government-owned launch sites by American launch companies. Arianespace officials argue that their company has to pay almost half of the costs of the range operation and maintenance of their launch site located in Kourou, French Guiana.

"We have to keep a close eye to our cost and at the same time, we observe what's going on with our competitors," Sanchez told SPACE.com, "because this has a direct impact on launch costs."

Arianespace expects the European governments to at least continue their funding, through ESA, of the Guiana space center -- Centre Spatial Guyanais (CSG), in Kourou -- which has an annual budget of about $260 million. For Arianespace the cost impact per the launch is estimated at $12.5 million.

1999 wasn’t a good year for the world launch market as only 15 geostationary transfer orbit launch contracts were in competition internationally, compared to 25 launch contracts in 1998. That said, Arianespace still won 80 percent of the launch contracts by booking 12 orders and recorded launch revenues of just under $1 billion.

For 2000 there have been clear signs of an upswing. "Right now we are negotiating 32 satellite launches," said Jacques Rossignol, chief operating officer of Arianespace at the Guiana space center. "The backlog list of our competitors is almost empty and they are ready to do anything to get some contracts," he said.

As new geostationary-capable rockets are introduced on the market after delays due to technical difficulties, such as the Deltas 3 and 4, and the Atlases 3 and 5, the competitive leadership of existing launch vehicles like the European Ariane is reinforced. These American rockets (Delta and Atlas), called EELVs (the low-cost U.S. Evolved Expandable Launch Vehicle), are built to cut costs and to cut into Arianespace's 55-percent market share.

In the United States and Russia, some of the world's largest aerospace firms, including Lockheed Martin and Boeing from the U.S. and Russia's Khrunichev, have formed gigantic partnerships, such as International Launch Services (ILS).

According to Paris-based Euroconsult, a group of aerospace analysts, the number of payloads put in orbit between 2000 and 2009 will nearly double. Its market value is estimated at between $45.6 and $55.6 billion.