At £2 billion for updating, & the likely cost of keeping 30 year old Boeing 707 airframes flying even with relatively modern CFM56 engines, I think that a one for one replacement by any of the current western AEW aircraft, even the biggest & presumably most expensive (the 737 AEW), should pay for itself almost immediately.
Per the MOD, the
2015 SDSR called for keeping the Sentry in service until 2035... whether or not that is technically feasible or economically sensible is of course another story.
Looking through some things, Turkey's Peace Eagle programme which delivered four Boeing 737-700 AEW&C aircraft based on the RAAF E-7 Wedgetail for an initial contract price of USD$1.6 bil. back in 2002, which included a software support centre. While time (and inflation) has moved on that would suggest that a 1:1 replacement of the RAF's current E-3D Sentry AEW.Mk1 for a version of the Boeing AEW&C would be a little over £3 bil.
While it appears that there would be a higher up front cost for getting a version of the Wedgetail, I suspect both the capabilities and operating/support costs would be better than that of upgraded RAF Sentries. I would not be surprised if it was projected that my estimated £1 bil. higher up front cost would be made up over a 15+ year service life by increased mission availability, reduced operating costs, and a potentially significantly reduced maintenance burden. The first Sentry entered RAF service in July, 1991 so has been in for 27 years at present. If the Sentries are kept until 2035, the type would have been in service for 44 years, while the airframe would have been out of production since 1992...