Raytheon [RTN] has achieved a key milestone in its potential $1 billion Navy Multiband Terminal (NMT) program with the first production order for next-generation NMT satellite communication terminals.

“NMT gives the Navy secure communications connectivity to the latest satellite constellations that users can absolutely depend on, in a smaller package, and at much lower cost,” Brian McKeon, vice president, Raytheon Integrated Communications Systems, said Monday in a statement. “This success keeps the promise we made to our armed forces to develop, demonstrate and deliver a multibanded, secure terminal utilizing the Advanced Extremely High Frequency waveform.”

The Navy award follows a successful field test and Milestone C Review that marks the completion of complex system development.

The $37.6 million initial production award is for 22 systems, consisting of 15 ship, five submarine and two shore terminals, along with other services and products.

With the procurement of terminals during a five-year production period, the program’s value of system development and production could potentially reach $1 billion, Raytheon said.

NMT is a family of multibanded ship, submarine and shore communications terminals providing the Navy and international partners, with the possibility of selected Army and Air Force users, a powerful and reliable new capability in support of its net-centric architecture.

The terminals will provide all Navy military-band satellite communications up to five times the bandwidth and less size, weight and power than the systems they will replace.

NMT integrates its Extremely High Frequency/Advanced Extremely High Frequency (EHF/AEHF) capability with two-way military Ka- and X-band, and the Global Broadcast Service.

NMT operates in the EHF/AEHF low data rate, medium data rate and AEHF extended data rate communication modes.

In addition, NMT is compatible with Wideband Global SATCOM, backward compatible with legacy satellite systems, and interoperable with legacy Navy and other service terminals.

Raytheon was initially awarded the competitive NMT prototype development phase in August 2003 and won the competition for the engineering development model phase, which is drawing to a close, in October 2007.