The UK Competition and Markets Authority is to launch a market investigation following a consultation, opened in July 2021, which set out concerns about the impact of the dual role of Motorola as the owner of the company providing the current mobile radio network for police, fire and emergency services and as a key supplier in the roll-out of the planned new Emergency Services Network (ESN).
After the CMA considered the evidence gathered and reviewed the responses to this consultation, an independent group will now investigate the sector and decide if there are problems, and if so, put in place appropriate solutions. The CMA is concerned that the market for the supply of the mobile radio network used by all emergency services in Great Britain might not be working well, resulting in a more expensive service for customers.
The concerns include insufficient information being provided on pricing, particularly in relation to the projects and associated costs needed to maintain and refresh the current network. As a result of this, and the importance of the Airwave network for public safety in Great Britain, the UK’s Home Office is in a weak bargaining position and unable to secure value for money.
Due to Motorola’s dual role, Motorola has an incentive to delay or shape the roll-out of the ESN to its advantage, given the significant profits it currently receives from operating the Airwave network.
“As the sole provider of critical mobile radio network services used by our emergency services, we’re concerned that Motorola could be cashing in on its position, leaving taxpayers to cover the cost,” said Andrea Coscelli, Chief Executive of the CMA. “We’re now referring this market for a full investigation so that we can thoroughly examine these concerns and, if necessary, take action to address any problems.”
The Airwave network was commissioned by the Home Office in 2000 and the agreement was due to end in December 2019 to be replaced with ESN, a new secure communications solution using a commercial 4G mobile network.
Motorola gained its dual role by purchasing the Airwave network in February 2016, two months after it had entered into a contract with the Government to provide software for ESN. The merger was cleared by the CMA, in part because of the general expectation that the Airwave network would be shut down by 2019.
"We strongly believe that a market investigation is not warranted," said a spokesperson for Motorola Solutions. "We have provided financial transparency throughout this project, including audited, statutory financial statements, detailed reviews of CAPEX and spend, and financial plans for the Airwave network."
"The Airwave service delivers exceptional value for money for the UK taxpayer. Motorola Solutions has provided price reductions even while making significant investments to maintain the network, which is relied upon by the U.K. emergency services every day and continues to function at the highest levels. We reject the assertion that we have an incentive to delay the implementation of the ESN. In fact, we continue to deliver on our commitments and invest heavily in the ESN programme and its launch remains our key priority for the benefit of public safety professionals and citizens across the country."
"This is a contractual matter between the Home Office and Motorola Solutions and this investigation threatens the principles of long-term government contracting in the UK. We look forward to working with the CMA independent group to demonstrate that Motorola Solutions continues to provide exceptional value for the UK emergency services."
Motorola Solution was created in 2011 after Motorola sold its cellular infrastructure business to Nokia Siemens Networks. In 2014 it sold its Enterprise business, mostly based around Symbol Technologies, to Zebra Technologies to focus on wireless technology and radio network operation.
More details on the CMA case are on the Mobile radio network services case page.
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