UK competition watchdog delays Airwave-Motorola Solutions ruling until April

The Competition and Markets Authority (CMA) in the UK today announced that it plans to issue its final decision in April as part of an investigation of the Airwave TETRA network—a ruling that could investigation that could cost Motorola Solutions more than $1 billion in projected revenue during the next several years.

CMA made the announcement by updating its administrative timetable on its website today. This update to the scheduled timeline is the latest of several issued by the CMA, which has been investigating whether Motorola Solutions has used market power to secure “supernormal profits” from its ownership of the Airwave TETRA system that provides mission-critical communications to UK public-safety agencies.

While such delays in the case have become a fairly common occurrence for the CMA in this case, it is possible that this could be the last time such a measure is necessary. By statute, the CMA is required to publish its final decision related to the Airwave investigation by April 24, according to the CMA website.

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—to be effective from 2023 through 2026–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.

Motorola Solutions CEO Greg 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. However, there has been no public indication whether any such negotiations have occurred or are likely to happen in the future.

In fact, the few interactions between the Home Office and Motorola Solutions that have been made public indicate 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.

Meanwhile, Motorola Solutions has stated in filings with the CMA that the UK Home Office should be required to the terms of the latest Airwave contract extension signed in December 2021.

Motorola Solutions’ Brown has been critical of the CMA’s preliminary decision, claiming that “it’s disproportionate, it’s unprecedented, it’s overreaching.” In addition, 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.