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Ofcom Raise ESN Linked Competition Case with Motorola and Sepura

Friday, October 23rd, 2020 (11:09 am) - Score 1,848
sepura_sc21_handset_esn_Uk_airwave_tetra

Ofcom UK has today given notice to Motorola and Sepura of a proposed infringement decision, which provisionally finds that the pair “broke competition law by exchanging competitively sensitive information” in relation to a contract for the continued operation of Airwave, the existing Emergency Services Network (ESN).

At present the emergency services (police, fire, ambulances etc.) communicate via the Motorola-owned Airwave network, which is believed to cost the UK around £3bn and harnesses the TETRA (Terrestrial Trunked Radio) network technology. However, TETRA is slow (dialup like data speeds but it could go a bit faster with upgrades) and expensive, although it does deliver excellent voice coverage (c.97% geographic reach).

The TETRA network was due to be retired some years ago as part of the Government’s effort to replace it with a modern 4G mobile powered ESN, but that has been beset by delays and cost overruns (here). As such it has become necessary to keep the Airwave network running for several years longer than planned.

In keeping with that the Police ICT Company, in 2018, ran a procurement exercise to address a potential shortfall in TETRA devices, accessories and services. Sepura provides some of the handsets and equipment for use with the Airwave network and thus was a natural bidder for such a contract. The other potential supplier was Motorola itself.

However, Ofcom has provisionally found that, between 5th September 2018 and at least 18th September 2018, “senior employees” at Motorola and Sepura exchanged information on strategic pricing intentions for the tender run by the Police ICT Company.

Ofcom’s Statement

Our provisional finding is that this exchange of information restricted or distorted competition in the supply of TETRA devices, accessories and services for use on the Airwave network.

We have also provisionally found that this exchange of competitively sensitive information occurred in a highly concentrated market, where Sepura and Motorola were effectively the only two competitors.

The regulator has now invited both companies to respond to their findings before a final decision is made on whether or not competition law has been broken.

Leave a Comment
3 Responses
  1. Avatar FTTP4ALL says:

    It’s situations like these which casts serious doubts about private/ public sector precurement processes. Nowadays, when we hear about big infrastructure projects being put up for precurement it’s almost synonyms with companies rigging the process and its almost taken for granted this kind of thing goes on with all government projects. The worst part about it is that we almost know nothing will ever come of it, it’s like they either get a slap on the wrist or a fine which to the average citizen looks like a huge amount but to the companies involved is just chump change.. For those caught out being involved in these acts they would put any financial penalties down to cost of doing business.. Nothing serious ever comes from it.. Its a shame this stuff goes on as it inflates actual costs which in the end we all pay the price for, except the top execs who get to have their wealth protected off-shore.. Sad!!!

  2. Avatar Buggerlugz says:

    Wonder what the issue was with 4G? Lack of proper implementation perhaps, they knew what it was capable of providing (and wanted the highest bandwidths available this time round) but ESN didn’t want to pay for it to reach anywhere near 4G’s actual capabilities?

  3. Avatar Spectator says:

    TETRA itself is not expensive. The Airwave contract negotiated by the UK government to supply the TETRA system is expensive. Likewise, the ESN contract will turn out to be expensive (it already has). In both cases, the expense has nothing to do with the underlying technology (TETRA or PTT over LTE) and everything to do with how the government ran the procurements. Namely, it is commercial rather than technical. So long as the government continues to create a sole supplier (Motorola) environment for public safety infrastructure, that infrastructure will be expensive. Or not delivered..

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