UK competition watchdog sniffing around Motorola profits after delay to replace company's Airwave service
Blue-light radio network drags on, adding excess £1.2bn to telco's coffers
Updated The UK's competition regulator is consulting on whether to launch a probe into the supply of emergency services telecoms and data networks that could deliver £1.2bn in excess profit for Motorola from 2020 to 2026.
Motorola owns the Airwave mobile radio network, which was first commissioned in 2000 to support the police, ambulance, and fire services.
The Competiton and Markets Authority (CMA) is now taking an interest because Motorola won one of the key contracts for ESN in 2015 and purchased Airwave Solutions, the owner and operator of the legacy Airwave network in 2016. The merger was cleared by the CMA at the time because the government expected Airwave to be shut down by 2019.
In its consultation over a proposed market investigation, the watchdog said: "Government officials and other stakeholders – in particular the [public spending watchdog] National Audit Office and the [Parliamentary spending watchdog] the Public Accounts Committee – have expressed concerns regarding Motorola's position and incentives to deliver ESN, given the ongoing high profitability of the Airwave network."
The CMA said that Motorola could stand to make excess profits of about £1.2bn in the period from 2020 to 2026 – a cost that will ultimately fall to the British taxpayer.
In a prepared statement, Andrea Coscelli, CMA chief executive, said: "At the moment, Motorola is the only provider of critical mobile radio network services used by our emergency service workers and is involved in both the current and future setup. We're worried that the company could be cashing in on its position, while taxpayers are left to foot the bill.
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"The CMA is minded to launch a market investigation to dig deeper into its concerns and will now consult with a range of stakeholders, including the government, on its plans."
The regulator has put forward two ideas in its consultation that might help solve the problem: namely a way of regulating Motorola's profits on the Airwave network or a ruling to require Motorola to sell the legacy network.
ESN was designed to offer a new mobile voice and data network for police, ambulance, and fire services. The project began in 2011, contracts were awarded in 2015, and it was set to go live in 2017, but went through a complete revision in 2018 and has since had a "mindset reset" adding £1bn in costs and a further delay of two years, Home Office boss Matthew Rycroft told the Public Accounts Committee last year.
Joanna Davinson, chief digital, data and technology officer at the Home Office, also told MPs on the PAC that "a year's delay across the whole of the legacy estate is in the ballpark of £550m."
In reward for her role overseeing the ESN and other Home Office projects for the last three years, Davidson has been appointed executive director of the UK government's new Central Digital and Data Office. ®
Updated to add at 07:49 UTC on 9 July 2021:
Motorola has been in touch to say: "We are aware that the UK Competition and Markets Authority is consulting on whether to launch a market investigation into the Airwave network.
"As a trusted technology partner to the UK market for more than 50 years, Motorola Solutions remains committed to working with the Home Office to deliver mission-critical communications. This includes the Airwave network that UK emergency services rely upon every day, and the safe transition to next-generation technologies (Emergency Services Network)."