UK watchdog delays final decision on Motorola Solutions’ role in Airwave to February
Publication of the final decision outlining Motorola Solutions’ role in the Airwave TETRA system that provides mission-critical communications to public safety agencies in the United Kingdom (UK) is expected to be delayed until February, according to an updated timeline from the Competition and Markets Authority (CMA).
CMA, the competition watchdog agency in the UK, released the new timetable on Tuesday. The new timeline calls for publication of the CMA’s final decision in February, which would two months later than scheduled in the previous timeline. It also called for response hearings to be conducted in December and early January—a delay of about a month from the previous November/December schedule for hearings in response to the CMA’s provisional decision that was released in October.
Even with the delays, the CMA is slated to publish its final decision on its investigation into the Airwave situation prior to the statutory deadline of April 2023.
No official reason was provided by the CMA for releasing a new timeline, but some industry observers said they were not surprised, given the circumstances. Conducting response hearings in November seemed challenging, as some key factors in the complex matter—centering around CMA’s contention that Motorola Solution is slated to receive about 160 million pounds (more than $188 million) annually in “supernormal” profits from Airwave—have changed significantly in recent weeks.
Released last month, CMA’s provisional decision proposes that Motorola Solutions be subjected to price controls that result in the vendor seeing its upcoming four-year Airwave extension being reduced by $250 million per year than the contract that the UK Home Office signed less than a year ago.
Two weeks ago, Motorola Solutions announced that it “likely” will exit its software-and-services vendor role for the Emergency Services Network (ESN)—a much-delayed public-safety LTE initiative that was supposed to replace Airwave—before its existing contract for the project expires in 2024.
This delayed CMA schedule potentially could provide additional time for Motorola Solutions to negotiate a new Airwave agreement with Home Office officials—something Motorola Solutions CEO Greg Brown said he is willing to consider.
CMA provisional decision proposes limiting Motorola Solutions’ annual revenue from Airwave to less than 200 million pounds ($224.3 million), which would be less than half of the 433.5 million pounds ($486.2 million at current exchange rates) in revenue that Airwave reported in 2020. Brown has noted that it is possible that Motorola Solutions could negotiate with the UK Home Office to reach different financial terms than the significant decreases proposed by the CMA.
“It’s also worth mentioning that there is a notation in the actual provisional decision that includes a potential invitation for the Home Office and us to agree to a different arrangement than what the CMA has proposed,” Brown said during his company’s quarterly call with analysts earlier this month. “That’s explicit and referenced embedded in the provisional [decision]. We would certainly be open to that conversation.”
Between the ESN announcement and the proposed CMA remedies associated with the Airwave investigation, Motorola Solutions could see its projected UK revenues for the next four years decrease by more than $1 billion.
CMA’s delayed timeline comes as the UK government has seen significant turnover at the highest levels in recent months, although it not clear whether this has had any impact on the CMA schedule or decisions.
On Oct. 25, Rishi Sunak became the UK’s third prime minister in less than three months. Sunak succeeded Liz Truss, who held office for about seven weeks after replacing Boris Johnson on Sept. 5.
Meanwhile, there also have been considerable change within the leadership role of the UK Home Office. Priti Pratel resigned as Home Office secretary a day after Boris Johnson resigned as prime minister. Suella Braverman succeeded Pratel as Truss became prime minister, but she resigned on Oct. 19 amid a controversy revolving around the use of a private e-mail account and was replaced briefly by Grant Schapps.
However, Schapps served as Home Office secretary for less than a week. When Sunak became prime minister after the Truss resignation, he reinstated Braverman to lead the Home Office.