The UK Ministry of Defence (MoD) has awarded Paradigm Secure Communications, the European consortium led by Astrium, a £2 billion ($2.8 billion) contract to build and run the Skynet 5 communications satellite system for UK armed forces.

Paradigm was chosen as the preferred bidder for the contract, which is expected to be finalised within six months under the UK's Private Finance Initiative, against competition from the Lockheed Martin-led Rosetta consortium.

Under the contract, which spans at least 18 years, Paradigm will take over the operation of existing Astrium-built Skynet 4 satellites, and from 2005 will replace these with two Skynet 5 satellites for global coverage. Another satellite will be kept as a ground spare.

The craft will be based on the Astrium Eurostar 3000 bus. Previous Skynet systems and the current fleet of Skynet 4s are operated by the MoD.

The agreement comes as a major boost for Astrium, which is 75%-owned by EADS and 25%-owned by BAE Systems. Paradigm also includes Cable & Wireless, Cogent DSN, General Dynamics Decision Systems, Logica, SEA and Serco, and has support from Stratos for Inmarsat satellite communication services.

Astrium says that by winning the UK contract it has bolstered chances of securing business with NATO, since the alliance's Astrium-built 4A and 4Bderivatives of the Skynet 4 satellites need to be replaced. The organisation has set a 22 March deadline for comments on an "intent to tender" for new satellite communications. Astrium hopes either to sell capacity from the MoD Skynet 5 satellites or supply NATO with a dedicated Skynet 5 satellite, say sources.

Source: Flight International