Motorola Solution does not expect public-safety LTE revenues from key U.S., UK initiatives until at least 2018

Motorola Solutions has won a key public-safety LTE contract in the United Kingdom (UK) and plans to compete for FirstNet’s public-safety LTE business in the United States, but the company likely will not realize revenue from either effort until after 2017, Motorola Solutions Chairman and CEO Greg Brown said this week.

Conversely, Motorola Solutions now has assurances that Great Britain first responders will use the company’s TETRA network—purchased from Airwave for $1.05 billion in a deal that was announced last fall but completed last week—for four years, Brown said during the Motorola Solutions’ earnings call on Monday. Motorola projects that it will earn about $450 million in revenue from the Airwave system this year.

 “We’re thrilled with the acquisition of Airwave, both strategically and financially,” Brown said during the earning call, which was webcast. “Probably the most important element is that, as part of the negotiation, we’ve resolved all disputes, and all contracts have been extended through the end of 2019.

 “So, what we now think about the predictability, financial visibility and commensurate earnings in cash as it relates to that acquisition is substantial and represents just under $2 billion in backlog through the extension of those contracts.”

Previously, UK officials indicated that the Airwave contracts would expire in 2017, when operations reportedly were slated to begin on the proposed public-safety LTE network. In fact, the UK’s stated plans to transition quickly to LTE has been cited on numerous occasions as a driving factor for accelerated work on mission-critical push-to-talk (MCPTT) standard at 3GPP, the standards body for LTE.

In addition to being the TETRA provider in Great Britain, Motorola Solutions also has won a $430 million contract in association with the rollout of the UK’s public-safety LTE network. British mobile carrier BT, which completed its purchase of EE last month, is slated to provide the LTE connectivity for the Emergency Services Network (ESN). Meanwhile, Motorola Solutions was the only vendor to submit a bid to integrate emergency-services capabilities for the proposed ESN, known as “Lot 2.”

With both TETRA and LTE, Motorola Solutions is working with the UK’s Home Office—the ministerial department that oversees security efforts, Brown said.

“We will work very closely with the Home Office customer as we transition and—I think, for a long time—have complementary networks coexist,” he said. “So we will drive the value creation through Airwave and also work closely with the customer on the rollout of ESN at some point in the future.”

Brown said it is “too early” to speculate what might happen to the TETRA network after 2019. When asked about potential revenues from the new LTE network in the UK, Brown said he believes the company will generate its first revenues from the deal “past 2017.”

“Again, we’re going to work with the Home Office on the right optimization and mix,” Brown said. “But, from a planning standpoint, [expecting ESN revenue to be realized after 2017] is probably a prudent thing to do.”