CMA investigates concerns tech company ‘cashed in’ on monopoly with Airwave system
Last modified on Mon 25 Oct 2021 10.27 EDT
The UK’s competition regulator is investigating Motorola over concerns that it has “cashed in” on its monopoly over mobile networks for the UK emergency services.
The Competition and Markets Authority (CMA) said on Monday it would launch a market investigation into the Airwave network that is used by police, fire and other emergency services to communicate securely.
The Airwave system was commissioned in 2000 by the Home Office under Labour. The agreement was due to end in December 2019, with a total predicted cost of £1.5bn. However, a cheaper planned replacement also run by Motorola, the Emergency Services Network (ESN), was delayed, meaning the company received higher profits for retaining Airwave.
The contracts may have resulted in a “more expensive service for customers and, ultimately, the taxpayer”, the CMA said.
The CMA alleged Motorola had given insufficient information on how much Airwave costs to run to the Home Office, putting the government in a “weak bargaining position and unable to secure value for money”.
Andrea Coscelli, the CMA chief executive, said: “As the sole provider of critical mobile radio network services used by our emergency services, we’re concerned that Motorola could be cashing in on its position, leaving taxpayers to cover the cost.
“We’re now referring this market for a full investigation so that we can thoroughly examine these concerns and, if necessary, take action to address any problems.”
Concerns over the switch from Airwave to the ESN were identified as early as 2016 by the National Audit Office (NAO), which said it was untested and that it may not be suitable for some communications for counter-terrorism officers. The ESN system was designed to save money by partly relying on existing commercial mobile phone networks rather than a separate one.
In 2019 the NAO estimated that under a potential “near worst-case” scenario,
the Airwave network shutdown could be delayed until December 2026.
In July, when the CMA said an investigation was being considered, it estimated Motorola could make excess profits of about £1.2bn between 2020 and 2026.
In its latest report the CMA suggests the Home Office has some powers under the contract to recoup costs of the continued use of Airwave. However, partly redacted points in the report suggest very long delays were not covered.
A Motorola Solutions spokesperson said: “We strongly believe that a market investigation is not warranted. The Airwave service delivers exceptional value for money for the UK taxpayer.”
She said that the company had cut its prices while investing in Airwave to keep it running, and that it “continues to function at the highest levels”.
“We reject the assertion that we have an incentive to delay the implementation of the ESN,” she said.
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