Final UK decision on Motorola Solutions’ role in Airwave pushed to March

A final decision from the Competition and Markets Authority (CMA) investigation that could cost Motorola Solutions more than $1 billion in projected revenue from its Airwave TETRA network in the United Kingdom (UK) is now scheduled to be released in March, according to the CMA website.

Previously, the CMA administrative timeline indicated that the final decision from the Airwave investigation would be published this month, but the CMA website was updated yesterday with a projected March release of the final decision.

Motorola Solutions CEO Greg Brown last week indicated that this delay was possible, noting the CMA’s intended February release of the final decision before stating “maybe it’s next month, but it’s relatively soon.”

Brown provided no other new information about the matter, but he reiterated Motorola Solutions’ disagreement with the notion that UK government sanctions against the company are appropriate.

“We remain unchanged in our finding and belief that with full conviction that their (CMA officials’] effort is disproportionate, it’s unprecedented, it’s overreaching,” Brown said during Motorola Solution’ quarterly earnings call with industry analysts.

Brown previously has stated that Motorola Solutions is prepared to “exhaust every legal opportunity or avenue in front of us to defend the position,” if the company disagrees with the outcome of the CMA investigation.

In its provisional decision that was released in October, the CMA proposed pricing regulations that would slash about $1 billion from the Airwave revenue that Motorola Solutions would receive under the current four-year contract that was signed in late 2021 with the UK Home Office.

At the heart of the investigation is CMA’s determination that Motorola Solutions has been realizing “supernormal” profits from its Airwave contract extensions with the Home Office. To address the matter, CMA’s provisional decision proposes limiting Motorola Solutions’ annual revenue from Airwave to less than 200 million pounds ($240.7 million)—less than half of the 433.5 million pounds ($521.7 million at current exchange rates) in revenue that Airwave reported in 2020.

Brown previously noted that it would possible that Motorola Solutions could negotiate with the UK Home Office to reach different financial terms than the significant decreases proposed by the CMA. There has been no public indication whether any such negotiations have occurred or are likely to happen in the future.

In fact, what little interaction that has been made public between the Home Office and Motorola Solutions indicates a growing divide between the entities. Since CMA released its provisional decision, the UK Home Office has asked that an additional $600 million in Airwave revenue be recovered from Motorola Solutions.

In a related matter, the UK Home Office also announced last month that Motorola Solutions is no longer one of the vendors charged with the development of the Emergency Services Network (ESN)—the much-delayed, LTE-based public-safety broadband network that is supposed to replace Airwave. Motorola Solutions will provide “termination-assisting services” associated with the ESN for 12 months ending in December—a fact that Brown confirmed last week.

Between the ESN announcement and the proposed CMA remedies associated with the Airwave investigation, Motorola Solutions could see its projected UK revenues during the next four years decrease by more than $1 billion.