The British Defence Ministry on March 9 said it would extend its multiyear contract for satellite telecommunications services with Paradigm Secure Communications by two years, to 2022, adding $600 million in value and leading Paradigm to order a fourth Skynet 5 satellite, to be launched in 2013.
Quentin Davies, British minister for defense equipment and support, said the contract extension will also secure about 800 jobs and create 100 posts, mainly at satellite builder Astrium’s Stevenage and Portsmouth facilities in England.
In a contract that remains the largest of its kind, the British government in 2003 contracted with Paradigm Secure Communications, part of the Astrium group, to provide all the Defence Ministry’s beyond-line-of-sight communications. The original contract, valued at 3.6 billion pounds ($5.44 billion), stretched to 2020.
To meet the contract’s data throughput conditions and to provide in-orbit backup, Paradigm and Astrium built and launched three Skynet 5 satellites in 2007 and 2008. The third, Skynet 5C, was intended as an in-orbit backup unit. But British defense officials have said in recent months that demand for secure communications has far exceeded forecasts, and that they had begun using the Skynet 5C satellite on a regular basis rather than keeping it solely as a spare.
Darrell Midgley, head of the British Defence Ministry’s defense equipment and support, information systems and services networks, said in a March 9 statement: “The demand for satellite communications is growing faster than originally predicted. To ensure that future operations will continue to have access to the vital communications they may need, the [Defence Ministry] has decided to make arrangements to take advantage of the services that a fourth satellite in the Paradigm’s Skynet constellation would provide.”
The two-year service extension, plus an increase in annual throughput, has been assured with the addition of 400 million pounds to the services contract. The British Defence Ministry said that the remaining services to be provided under the contract are valued at 3.5 billion pounds, including the two-year extension to 2022.
In keeping with the terms of the contract, often referred to as a private finance initiative or a public-private partnership, the British Defence Ministry will not need to pay for the new capacity until several years from now, with the bulk of the payment coming around 2020.
Paradigm and Astrium had already begun work on a Skynet 5D satellite as part of a risk-reduction program in the event of a launch or in-orbit failure of one of the three Skynet 5 spacecraft already in service. Paradigm said in a March 9 statement that the Skynet 5D satellite’s electronics payload had already been built.