{"id":28991,"date":"2021-10-25T13:48:18","date_gmt":"2021-10-25T12:48:18","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=28991"},"modified":"2021-10-25T13:50:11","modified_gmt":"2021-10-25T12:50:11","slug":"competition-watchdog-investigates-motorolas-role-in-uk-4g-esn","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/10\/competition-watchdog-investigates-motorolas-role-in-uk-4g-esn.html","title":{"rendered":"Competition Watchdog Investigates Motorola’s Role in UK 4G ESN"},"content":{"rendered":"

Following a probe (here<\/a>), the Competition and Markets Authority<\/a> has decided to open a formal investigation into Motorola’s dual role within the delivery of the UK Government’s new 4G<\/a> based Emergency Services Network (ESN) contract, which it fears could result in a “more expensive service for customers and, ultimately, the taxpayer<\/em>“.<\/p>\n

The emergency services (police, fire etc.) have only recently started the slow process of moving away from the old Motorola-owned Airwave<\/strong><\/a> network, which is believed to cost the UK around \u00a33bn and harnesses the TETRA<\/strong> (Terrestrial Trunked Radio) network technology. However, TETRA is slow (dialup<\/a> \/ ISDN like data speeds, but it could go a bit faster) and expensive, although it does deliver strong voice coverage (c.97% geographic reach).<\/p>\n

NOTE:<\/strong> Mobile operator EE<\/a> (BT<\/a>) holds the main 4G<\/a> based (mobile broadband) network contract<\/a>, but the ESN covers a variety of different areas with other suppliers (e.g. handsets, software etc.). The ESN has its own separate setup alongside EE<\/a>’s commercial 4G<\/a> network. The two should not be confused.<\/div>\n

The high cost of Airwave is often highlighted as one of the main reasons why the UK government, in 2015, decided to replace it with a 4G alternative. The Home Office originally expected that emergency services could start using the ESN in September 2017, allowing Airwave to be replaced by December 2019, but the contract ended up being billions of pounds over budget and years behind schedule.<\/p>\n

Due to all that, it quickly became necessary to keep the Airwave network running for several years longer than planned, albeit at a huge additional cost (see below). The problem is that Motorola gained a dual role by purchasing the Airwave network in February 2016, two months after it had already 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.<\/p>\n

The Government, the National Audit Office (NAO) and the Public Accounts Committee (PAC) have all since expressed concern regarding Motorola’s position and incentives to deliver the ESN, particularly given the continuing profitability of Airwave. Similarly, the CMA previously noted that Motorola could now stand to make excess profits of about \u00a31.2bn in the period from 2020 to 2026, which will ultimately be footed by the taxpayer.<\/p>\n

The CMA began to probe all this in July 2021 and the bad news, for Motorola, is that they now intend to conduct a formal investigation.<\/p>\n

Key CMA Reasons for the Formal Investigation:<\/strong><\/span><\/p>\n

\u27a4 Insufficient information (particularly in relation to the projects and associated costs needed to maintain and refresh the current network) being provided to the Home Office in negotiations on the pricing of the Airwave network. As a result of this, and the importance of the Airwave network for public safety in Great Britain, the Home Office is in a weak bargaining position and unable to secure value for money.<\/p>\n

\u27a4 Due to Motorola\u2019s 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.<\/p><\/blockquote>\n

The CMA said that they would appoint an “independent group<\/em>” to run the investigation and “decide if there are problems, and if so, put in place appropriate solutions<\/em>“.<\/p>\n

Andrea Coscelli, Chief Executive of the CMA, said:<\/strong><\/p>\n

“As the sole provider of critical mobile radio network services used by our emergency services, we\u2019re concerned that Motorola could be cashing in on its position, leaving taxpayers to cover the cost.<\/p>\n

We\u2019re 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.”<\/p><\/blockquote>\n

Naturally, Motorola aren’t best pleased with the situation.<\/p>\n

A Motorola Solutions spokesperson said:<\/strong><\/p>\n

“We strongly believe that a market investigation is not warranted.<\/p>\n

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.<\/p>\n

The Airwave service delivers exceptional value for money for the U.K. 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.<\/p>\n

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.<\/p>\n

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 U.K.<\/p>\n

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.”<\/p><\/blockquote>\n

Suspicion seems to be the order of the day here, but proving that Motorola did something intentionally wrong may be much harder. Part of the problem also stems from the CMA’s original assumption that the Airwave network would be shut down by 2019, which was rather an ambitious expectation given the tendency of large government contracts to suffer big delays (i.e. on balance, they’re often more likely to be delayed than not).<\/p>\n

However, if the CMA were to find that the market is not working correctly, then it could choose to regulate Motorola\u2019s rate of return in relation to the Airwave network, or it may require Motorola to sell the Airwave network. Neither outcome would please Motorola.<\/p>\n","protected":false},"excerpt":{"rendered":"

Following a probe (here), the Competition and Markets Authority has decided to open a formal investigation into Motorola’s dual role within the delivery of the UK Government’s new 4G based Emergency Services Network (ESN) contract, which it fears could result in a “more expensive service for customers and, ultimately, the taxpayer“.<\/p>\n","protected":false},"author":1,"featured_media":25290,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[61,405,86,38],"class_list":["post-28991","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-4g","tag-ee","tag-law","tag-politics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nCompetition Watchdog Investigates Motorola's Role in UK 4G ESN - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Following a probe (here), the Competition and Markets Authority has decided to open a formal investigation into Motorola's dual role within the delivery\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2021\/10\/competition-watchdog-investigates-motorolas-role-in-uk-4g-esn.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Competition Watchdog Investigates Motorola's Role in UK 4G ESN - 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