London: The first element of a likely US$7.5 billion upgrade of the British armed forces’ satellite-telecommunications capabilities has finally been signed by the Ministry of Defence and Airbus Defence and Space.

The deal, worth more than US$630 million, will see Airbus build a new telecommunications satellite as a stop gap to bolster military capabilities ahead of the introduction of a new generation of space craft scheduled to start entering service towards the end of the decade.

Airbus and the MoD have been locked in negotiation over the deal to construct the satellite, known as Skynet 6A, since the company was nominated in 2017, without a competition, as the preferred supplier.

Under the terms of the deal the satellite, based on Airbus’ Eurostar Neo spacecraft, will be developed, assembled and tested in the UK. Planned launch date is 2025.

In a statement Airbus said the contract also covers technology development programmes, new secure telemetry, tracking and command systems, launch, in-orbit testing and ground segment updates to the current Skynet 5 system.

The deal will supplement a fleet of existing spacecraft built by Airbus as part of the Skynet 5 space telecommunications network operated by the company under a private finance initiative (PFI) deal which has been in operation since 2003.

Operation of the Skynet ground stations was also included in the deal. The PFI, including ground station element, ends in 2022.

A competition to run the ground stations as part of the wider Skynet 6 programme is already in play, with Airbus, Babcock, BT and Serco all bidding to secure the contract for what is called the Service Delivery Wrap.

In-service date for the first of the new communications assets is around 2028.

Announcing the satellite deal 24 hours ahead of the launch of the virtual Farnborough air show getting underway on July 20, UK Defence Secretary Ben Wallace said the “newest contested frontier is space and so we need to provide resilience and better communications for our forces. Skynet 6A is one of many solutions we shall be investing in over the next decade. This government recognises the urgent need to defend and promote space capabilities.”

Confirmation of the satellite deal by Wallace comes just two weeks after the British government took a US$503 million stake alongside Indian company Bharti Global in the rescue of failed broadband constellation supplier OneWeb.