The UK Space Agency has opened the second round of its Connectivity in Low Earth Orbit (C‑LEO) programme, releasing £30 million to accelerate components and technologies for next‑generation satellite constellations. Announced on 4 March 2026 by Space Minister Liz Lloyd, the call targets a global satellite communications market the government sizes at around £40 billion and growing at more than 10% annually. Officials frame the move as both an economic opportunity and a contribution to national security.
The new call sits within a C‑LEO programme launched in autumn 2023 and expected to run to the end of the 2029/30 financial year, with a total programme budget of up to £160 million. Call 2 is being delivered in partnership with the European Space Agency (ESA) as an ‘ARTES only’ round, with UK firms applying for National Delegate support before progressing through ESA’s processes. The government confirms a UK subscription of £141.4 million to ESA’s ARTES programme agreed at CMIN25, aligning domestic support with European co‑funding routes.
Funding mechanics are explicit. The available envelope is £30 million, with a minimum UK Space Agency grant request of £3 million per project and a minimum overall project value of £5 million including industry match. Matched funding is mandatory and capped by organisation type: up to 50% for large companies or very high‑value SME programmes; up to 75% for other SMEs; and up to 100% for universities and public research bodies acting as subcontractors without a commercial interest and within a 30% cost share, or up to 75% if they retain a commercial interest. Final rates remain at the Agency’s discretion and are applied to each organisation within a consortium.
Timelines and process are designed to compress time to contract. The call opened at midday (GMT) on Wednesday 4 March 2026 and closes at midday (GMT) on Monday 13 April 2026. UKSA aims to notify outcomes from Stage One by Friday 8 May 2026, with Stage Two submissions-ESA Outline Proposal and a UKSA Annex-due by midday (GMT) on Friday 12 June 2026 and final notifications targeted by Friday 17 July 2026. The round is run in partnership with ESA, and applicants invited beyond Stage One must submit via ESA’s OSIP portal in parallel with UKSA review.
Scope focuses on technologies that underpin resilient, scalable low‑Earth‑orbit networks. Priority areas include on‑board (regenerative) processing, active antennas, optical inter‑satellite links, networking and routing, and advanced user terminals. Projects should start around Technology Readiness Level (TRL) 4–5 and progress towards TRL 7 or higher by completion, with credible industrialisation plans and a clear route to market.
Policy objectives emphasise operational performance and sovereign control. The programme seeks faster processing, lower latency, improved cross‑link performance and greater assurance over where UK data is landed and stored, alongside strengthened positions for domestic suppliers within global constellation contracts.
Security and defence are explicitly referenced by ministers as part of the rationale for investment in satellite communications. Wider UK policy documents also note sustained defence investment, including around £5 billion over the next decade to enhance Skynet satellite communications and a further £1.4 billion for space domain awareness and ISR capabilities. The C‑LEO focus on industrialisation and supply‑chain depth is therefore material to both civil resilience and defence interoperability.
Recent defence procurement activity illustrates the demand signal. In February 2025 the Royal Air Force announced ‘Oberon’, a £127 million synthetic‑aperture radar satellite system with Airbus, intended to strengthen UK intelligence, surveillance and reconnaissance from orbit ahead of a planned 2027 launch. Commercial‑readiness work funded through C‑LEO could support adjacent capabilities that feed into such programmes.
Delivery record is emerging. The first C‑LEO call supported three projects with £18 million, involving eight UK companies and creating 26 specialist roles to date. Those projects are developing user terminals, active antennas and on‑board regenerative processors, with participating firms reporting accelerated development cycles and improved commercial positioning as a result of the initial awards.
Regulatory compliance is a gating factor but not an eligible cost. UKSA will not fund licensing or regulatory activities; instead, applicants must evidence a viable spectrum plan aligned with current government policy and, where relevant, demonstrate early engagement with regulators on novel uses. Ofcom’s updated guidance on licensing for non‑geostationary earth station networks-including user terminals and gateways in Ku/Ka bands-sets out the national framework applicants should account for when designing services and deployments.
Supply‑chain intent is clear: proposals must be led by UK‑based organisations, with any non‑UK spend justified as essential and likely to score lower than domestic activity. The guidance indicates a preference for onshore capability across the constellation value chain and expects proposals to demonstrate value for money, private investment crowd‑in and measurable economic outcomes such as jobs and capital deployed.
The announcement coincides with Space‑Comm Expo Europe at ExCeL London on 4–5 March 2026, where ministers plan to outline a vision for the UK as a ‘competitive, agile space power’. Organisers expect more than 5,000 delegates across industry, defence and government, placing the funding round in front of potential buyers and partners during two days of concentrated market activity.
For bidders, the window is tight and the thresholds high. Consortia will need to secure matched funding, define TRL progression to 7+, and show credible industrialisation pathways that align with ESA ARTES processes. With Stage One notifications due by 8 May 2026 and final decisions targeted for July, the round offers a rapid route from prototype to product for projects that can evidence market traction and regulatory viability.