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Motorola rejects CMA claims that its role in Airwave and ESN is conflict of interest

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Motorola has rejected suggestions that its position as both the owner of the existing Airwave public safety radio system and a supplier for the 4G Emergency Services Network (ESN) is a conflict of interest following the launch of an investigation by the UK competition regulator.

Airwave has been used by police officers, firefighters and ambulance crews since 2000 and was acquired by Motorola in 2016 – two months after it signed a contract with the government to provide software for the ESN.

The ESN is an LTE-based system that will provide emergency services with both critical communications and access to mobile applications that would improve public safety.

ESN delays

The CMA approved Motorola’s acquisition on the assumption that Airwave would be shut down in 2019 and replaced with the ESN, which was due to go live in September 2017. However the project has been subject to a series of delays and may not replace Airwave until 2025.

This means the Home Office has had to reach additional agreements with Motorola to maintain and upgrade the Airwave system. The ESN is now billions of pounds over budget, while the government is also forfeiting the promised cost savings over Airwave.

ESN is expected to save £200 million a year, while every extension of the Airwave contract adds around £500 million in annual costs.

The CMA is concerned that Motorola’s dual role means it has an incentive to delay or shape the rollout of the ESN to its advantage because of the huge profits it derives from Airwave. Meanwhile, there is a concern that the company isn’t transparent enough in negotiations which. combined with the fact that Airwave is hugely important to public safety, means the Home Office is in a weak bargaining position.

This, it is argued, ultimately leads to it unable to secure value for money and increases the cost to taxpayers. TechRadar Pro understands that the Home Office has been given some discounts on ongoing support to minimise the financial burden of delays to the ESN, however.

“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, CMA chief executive.

“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.”

Motorola rejections

The timing of the probe casts a shadow over negotiations for the next extension of support for Airwave, with the current agreement set to expire in 2022. Motorola rejects any allegations of wrongdoing and believes an investigation is unwarranted.

“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,” a spokesperson told TechRadar Pro.

“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 UK 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 U.K. emergency services.”

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Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.