UK Home Office agrees to four-year Airwave extension worth $2.09 billion to Motorola Solutions

Motorola Solutions will continue to provide mission-critical voice communications to public-safety services in the United Kingdom (UK) via the Airwave TETRA network through 2026, after the LMR vendor signed a four-year extension worth more than $2 billion with the UK Home Office.

Terms of the extension were not surprising, as officials for both the Home Office and Motorola Solutions have announced publicly the intention to continue use of the Airwave system through 2026, because the LTE-based Emergency Services Network (ESN) is not ready to replace Airwave yet. The annual financial terms of the four-year, £1.56 billion ($2.09 billion) deal are similar to the previous three-year Airwave extension that expires at the end of this year.

Representatives of Motorola Solutions and the UK Home Office signed the deal on Dec. 20, although information about the extension was not published until Jan. 21, according to this posting on a UK government website. Neither Motorola Solutions nor the UK Home Office has issued a press release about the $2 billion contract, but Motorola Solutions did provide a statement today in response to a request from IWCE’s Urgent Communications about the mater.

“We confirm that the Airwave network will continue to provide mission-critical services to the U.K. emergency services until the end of 2026, in accordance with the Home Office’s requirements,” according to the Motorola Solutions statement.

An announcement about a four-year Airwave extension has been anticipated for weeks, because the agreement between the UK Home Office and Motorola Solutions requires that any Airwave extension deal must be signed at least a year in advance of the current deal expiring. With the current three-year extension deal expiring at the end of this year, a new Airwave extension had to be in place by the end of 2021—something that was accomplished with the agreement on Dec. 20.

Still unclear is whether the Competition and Markets Authority (CMA) investigation into Motorola Solutions’ role as owner of Airwave could impact any terms of the recent four-year extension. To date, the UK Home Office and Motorola Solutions have not commented on matter, but a CMA spokesperson informed IWCE’s Urgent Communications that there is no CMA policy that would require an extension deal to be delayed.

CMA announced its investigation plans in October, after the regulator issued a report in July asserting that Motorola Solution is set to realize about £1.2 billion—$1.66 billion—in “excess profits” from 2020 through 2026 through extensions of the Airwave contract. With this in mind, CMA has suggested potential remedies to the situation would be to subject Airwave to government-determined price controls, mandate that Airwave utilize open-book accounting, or require Motorola Solutions to divest Airwave.

CMA has completed its comment-collection phase and preliminary results could be released in April, under the CMA’s current schedule for the matter.

Motorola Solutions has appealed the CMA decision to proceed with its investigation, asking asked the United Kingdom (UK) Competition Appeal Tribunal to review the matter. Motorola Solutions filed its appeal request on Dec. 22—two days after the company signed its four-year Airwave extension contract with the UK Home Office.

Initial UK government plans called for the Airwave TETRA system to be retired at the end of 2019, when the LTE-based Emergency Services Network (ESN) was supposed to be complete. But ESN is still not operational, necessitating a first Airwave extension through 2022 and this second extension through 2026. In addition to owning Airwave, Motorola Solutions provides the software and services for the much-delayed and over-budget ESN—a dual role that CMA has indicated will be examined as part of its investigation.