BELFAST — The UK Ministry of Defence says “no final decisions” have been made on the £2.4 billion ($3.2 billion) Skynet satellite acquisition, despite reports that the department has selected US giant Lockheed Martin for the lucrative contract.

“This is an ongoing procurement process, and no final decisions have been made,” a ministry spokesperson told Breaking Defense in a statement. The Prime Minister’s press office has not responded to a request for comment at press time.

The MoD’s comment follows a report by Sky News last week, citing four industry sources, that UK Prime Minister Andy Burnham is reviewing the purported contract award decision.

Though the timing of a formal announcement for the Skynet Wideband Satellite System (WSS) procurement remains unclear, the prospect of Lockheed Martin UK beating longtime Skynet contractor Airbus Defence and Space UK has ignited a fierce political debate over British jobs, manufacturing capacity and the future of the country’s domestic space industry.

Skynet is the UK MoD’s military satellite communications network, providing long-range comms to British armed forces and allied militaries worldwide. The upcoming WSS procurement is part of the broader Skynet 6 Enduring Capability program, which aims to replace and expand existing constellation with two tranches of satellites in geostationary Earth orbit (GEO), the MoD spokesperson said.

The new satellites will carry military-grade X-band and Mil-Ka-band comms payloads and be supported with new ground infrastructure and launch operations.

Airbus UK currently designs and builds satellites at two UK production sites in Stevenage and Portsmouth, England, putting jobs at both facilities at stake if the company loses the contract.

Meanwhile, Lockheed has proposed establishing a new satellite production hub in Durham, England, which the company says would create a domestic manufacturing base and open up future export opportunities.

Ben Moores, a former UK defense secretary procurement advisor, said on X that a Lockheed Martin contract would mean any “UK work [out of the Durham facility] will be the equivalent of fitting the wheels on a US-built car.”

He claimed that a first satellite built by Lockheed would also be made in Denver, Colorado, while “Airbus have made it clear that all the hundreds of millions of pounds of European [space] work will relocate to the [European] mainland.”  

In contrast, Durham lawmaker Luke Akehurst has argued in favor of awarding the contract to Lockheed Martin, claiming on social media that “all the satellites will be built in County Durham” if the firm secures the deal.

An Airbus spokesperson declined to comment on the WSS competition, citing the ongoing MoD procurement process.

A Lockheed Martin spokesperson also declined to comment, but said in a statement that the company’s British subsidiary, Lockheed Martin UK, “will establish facilities to develop an ecosystem alongside our regional partners in the North East of England to provide the UK with a sovereign space capability.”

Unite, a large British trade union that represents workers at Airbus, renewed its call for the government to award the Skynet contract to Airbus following a government review meeting that included discussions about the award. The union said it “understands that some Ministry of Defence officials are willing to support the American bid,” raising concerns about the prospect of the contract going to Lockheed Martin.

The competing bids come as the Burnham government champions a “buying British” defense investment policy and pledges to deepen ties with European allies. Analysts say the decision could have major implications for the future of both British and European space industries, regardless of which company ultimately wins the contract.

Erin Pobjie, a senior fellow for space at the International Institute for Strategic Studies, warned that a Lockheed win could jeopardize the continuation of Airbus’s UK satellite operations and limit Britain’s participation in the planned European space merger known as Project Bromo.

“Since Airbus previously produced the Skynet satellites, awarding the Skynet 6 contract to Lockheed Martin might affect the continuation of Airbus satellite operations in the UK, with the knock-on effect of locking the UK out from the benefits of the planned merger of Airbus, Thales and Leonardo in Project Bromo,” Pobjie told Breaking Defense. In 2025, those three European primes signed a pact to bring their space businesses together and form a joint entity that is slated to begin operations in 2027.

The “optics” of awarding the wideband deal to Lockheed could also conflict with the UK’s interest in reducing its reliance on the United States, according to Tom Withington, a British defense analyst and Royal United Services Institute associate fellow.

“We need to look more towards Europe to build up [a] common security capability,” Withington said.

Sovereignty questions remain

The WSS competition comes amid broader questions about sovereign control over military satellites if the UK selects an American contractor. Those concerns have been brought into focus by Ukraine’s recent outcry over the US appearing to impose restrictions on Starshield — the US military version of the Starlink satellite network.

However, analysts cautioned against drawing a direct parallel between Ukraine’s experience and the UK’s consideration of a US-based company to build the next Skynet satellites, given the potential differences in how the systems would be owned and operated.

“If the UK government’s Skynet contract is with Lockheed Martin’s UK subsidiary to manufacture satellites that are then owned, registered and operated by the UK government, the US government cannot directly impose restrictions on access,” Pobjie said.

Withington also noted that the UK MoD could retain “full ownership” of the satellites and end Lockheed’s “further involvement” once manufacturing is complete, though that would likely increase costs as the ministry would need to train its own personnel to maintain the satellites.

Still, Pobjie cautioned that a UK-owned system could still leave the country reliant on US supply chains and export licenses for critical components, while also potentially exposing it to end-user restrictions depending on the contract terms.

Beyond the WSS procurement, the UK has also canceled plans to acquire Skynet’s sister Narrowband Satellite System (NSS). The Defence Investment Plan justified the decision by saying the capability gap would be addressed by “extending SKYNET 5 and utilising modern technology through different procurement routes, including by investing in ‘space as a service’ options, alongside allies.”

From a capability perspective, Withington said WSS will be a “key enabler” for the UK’s Digital Targeting Web program.

“I would expect that the new incarnation of Skynet will have residual bandwidth available for UK allies, which has been the situation in the past,” he noted.

The system’s use of the X-band frequency range will also be crucial for military satellite communications, Withington said. The frequency band is “earmarked for military and government use by the International Telecommunication Union. … So other people can’t muscle in and sort of challenge your use of it.”