UK mulls next-gen satellite subsidies for Brit companies

Almost £100M in handouts available for LEO connectivity projects

UK government may subsidize Brit companies working on low Earth orbit satellite connectivity projects - the aim being to support comms for remote parts of the country and boost the domestic satellite industry.

An announcement from the Subsidy Advice Unit (SAU), part of the Competition and Markets Authority (CMA), reveals that it was asked by the UK Space Agency (UKSA) to look over a subsidy scheme for the Connectivity in Low Earth Orbit (C-LEO) program.

The program was unveiled by UK government earlier this year as a scheme to fund development of the next generation of satellite communications hardware, an area where Britain has some notable strengths.

C-LEO promises to provide up to £93.75 million ($118 million) of grant funding, which may continue through to February 2028. Applicants will be able to apply individually or as part of a consortium and request funding for up to £25 million ($31.4 million) per project.

According to the SAU, the total percentage of project costs eligible for funding will be based upon the size and nature of the organization(s) applying. For large enterprises, this means 25 percent of the project costs, 35 percent for medium outfits and 45 percent for smaller enterprises. An additional 15 percent can be made available where projects demonstrate "effective collaboration."

Key areas identified as strong candidates for getting funding include the "communications hub," made up of onboard digital processing and supporting systems; optical links for inter-satellite communications; software (specifically AI) to ensure satellites stay in position; and end user ground terminals.

SAU said it will complete its report within 30 working days. Anyone wishing to comment can send submissions to the agency via email, but these must be received by December 19. SAU is set to publish its report on January 19.

The government reckons the value of low Earth orbit satellite constellations for communications was demonstrated during the ongoing war in Ukraine, where they have been able to ensure continuous and reliable connectivity, even in the most challenging circumstances.

The SAU said satellites will play a key role in extending connectivity to remote and rural parts of Britain, and the C-LEO scheme is to build on the country's "established and growing" satellite industry by providing UK researchers and businesses with critical support to drive the development of new constellations.

At the time of announcing C-LEO, the government said it was exploring whether funds could be supplemented by an additional £60 million ($75 million) from the European Space Agency's UK-backed Advanced Research in Telecommunications Systems (ARTES) program.

But is £93.75 million really enough, when compared with the €2.4 billion ($2.55 billion) the EU has budgeted for its IRIS2 satellite constellation project?

Gartner VP analyst and telecoms boffin Bill Ray said he approves of C-LEO, which appears to be directing cash where it can make a difference.

"I hate to be less cynical than usual, but in general terms, I rather like this plan. It's much better than throwing money into grand schemes built on CGI renders and political dreams, most of which never get off the ground," he told us.

"The idea seems to be to stimulate development of technologies which will be used by communication satellites in LEO, rather than pretending that the UK is going to build its own LEO constellation, and that's quite sensible," Ray added. "We do stand a good chance of providing some key technologies to make it happen." ®

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