MoD extends Skynet contract

For children of the 1970s, the name Skynet is synonymous with one thing: killer robots.

To the surprise of many devotees of the Terminator franchise, Skynet actually exists and is involved in military operations. Rather than developing cyborg killers in the shape of Arnold Schwarzenegger, it is a satellite programme that provides communications services to Britain's armed forces. The name also predates James Cameron's The Terminator in 1984.

The Skynet 5 programme is one of the largest private finance initiatives (PFI) ever signed off by the Ministry of Defence, provided by Paradigm Secure Communications, owned by the defence contracting giant EADS.

The MoD leases communications services for phones and internet using Paradigm's three "military hardened" satellites, and yesterday it signed a deal to launch a fourth and extend the contract for two years until 2022.

The National Audit Office said Skynet 5 would cost the taxpayer £3.6bn over the course of the contract, although the MoD pointed out that it is much cheaper to lease the systems than to build the hardware itself. Paradigm, a subsidiary of Astrium Services, itself a subsidiary of EADS, signed the deal with the MoD in 2003, since when it has provided military communications to conflict zones in the Balkans, Iraq and Afghanistan. The fourth satellite will extend the service's capacity. Astrium's chief executive, Eric Béranger, said Skynet 5 was a "pioneering step" in providing military satellite communications through a commercial firm.

The satellites not only allow troops to phone and email home, they provide communications from command centres to those in the field and on sea. They also provide video support for intelligence-gathering vehicles such as the unmanned aerial vehicles.

Paradigm used an older generation of satellites before launching Skynet 5A, 5B and 5C between 2007 and 2008. They are designed to be effective against hostile or non-hostile interference with their anti-jamming antenna. The older generation was launched in 1988 after several delays, with the previous Skynet satellite launched on a US rocket in 1974. Paradigm said: "When the current Skynet 5 constellation became fully operational in 2008 it was the start of a new era in military communications, using some of the most complex military satellite communication satellites ever built."

Since 2003, Paradigm has also provided military communications to Nato and countries including the US, France and Germany by leasing the excess bandwidth that the UK does not use.

The fourth satellite, the 5D, will be designed and built by Astrium. The spacecraft, which is as long as three double-decker buses, is set to be launched in three years.

The craft will be built at Astrium's sites in Portsmouth and Stevenage, creating 100 jobs and sustaining the existing 800 in those sites and in Wiltshire and Hawthorn. Astrium will also fund the move by turning to "private financiers in the City" but would not disclose who or the size of investment they were looking for.

Lord Drayson, minister for Science and Innovation, said: "The UK's thriving space and satellite industry has been a real recession-buster – creating jobs and achieving exceptional growth. The latest success cements the UK's position as a world leader in satellite technology." He added that the sector is forecast to be worth £40bn to the UK by 2030.