As to Watchkeeper I'll pass on the indigenous network and the technology thanks and just have the American UAV's which are available now, work and will (I'll be prepared to bet) be cheaper due to those massive production runs that you mention.
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How can i bet, and how can i collect that bet?
A decent bottle of Port, for a Scotch one?
You are focusing on the "cheap" part of the system (remember you are not buying a car, plane, tank, whatever, you are buying a "system of systems"), a few Predator flying tubes are useless if you dont have the Network to back them up, and that network was designed using already available American assets. Assets that Great Britain doesnt have, and those assets are bloody expensive.
Now, there´s a fine reason why the entire RAF 39 sqn is based at Creech AFB (that´s Indian Springs, NEVADA), that´s were the USAF Predator Community is based, they control the UAV´s fleet through Satelite.
Now, if you transform the small (five units) "add-on" RAF Predator fleet into a "Core capacity", to controll that fleet you have three choices:
1- Buy an entire world wide coverage mill satelite constelation.
If you think that the Eurofighter and the Trident replacement program are "expensive" you dont want to know the kind of budget that the Pentagon spends on space based bandwidth.
2- Rent bandwith.
Make a Government-to-Government contract for a few decades and rent bandwith with the Pentagon. Now, seeing how the American Armed Forces are perpetually bandwidth "thirsty", i can imagine that it wont be "cheap"... OH, and forget the "independent" part, any disagreement with the White House and those Predator became useless.
3- Create from the "ground-up" a theater relay comunications network that´s compatible with whatever His Royal Armed Forces are using (remenber the Radios at operation "Market Garden").
That means ground or aerial stations (E-3/ASTOR) controling the UAV fleet from "hundreds" of miles, instead of "thousands" of miles. This is the cheapest route, and if you choose a "off the shelf" aerial platform/UAV it will be even cheaper, nice idea! Let´s buy some predator´s, contract BAE (or another company) to create the network part, and be done with it...
Easy! Wait, why dont we open an international competition for the UAV part?
Grand idea!
And that was the story of "Watchkeeper", but instead of buying American kit, they´ve went for Israeli hardware.
So, using the "recurrent fly away costs" for American (or Russian, French, South African, Inuit, etc) hardware and then comparing it with the MOD Budget for a complete system, is quite useless. It´s a lot more complicated than that.
Cheers