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The United Kingdom (UK) Competition Appeal Tribunal dismissed Motorola Solutions’ appeal of the Competition and Markets Authority (CMA) ruling that the Airwave TETRA system is a monopoly and should be subject to price controls that promise to cost Motorola Solution more than $1 billion in projected revenue in upcoming years.
The CMA said the decision to cap prices will reduce the current price by almost £200 million per year.
After calling what the CMA called a “fair return” an “unprecedented overreach (which) will have a chilling effect on long-term investment”, Motorola appealed against the decision.
On Friday the Competition Appeal Tribunal, chaired by Bridget Lucas KC, ruled that their challenge was “fundamentally flawed” and that CMA’s approach was “not irrational or inconsistent”.
Motorola described the ruling as “highly concerning” adding: “In our decades of operating nationwide public safety networks around the world, we have not seen anything like this.”
The CMA said it will limit the amount Motorola can charge “to a level that would apply in a well-functioning competitive market”.
The cap will run until 2029, although there will be a review in three years.
Martin Coleman, chairman of the independent panel of experts conducting the CMA investigation, said: “Our investigation showed that Motorola held all the cards when it came to pricing.
“With no other providers in the market, our fire, police and ambulance services had no choice but to pay the rates set by Motorola – meaning they paid almost £200 million a year more than they would have if the market was working well.
“Our price cap puts a limit on how much Motorola can now charge for the use of its Airwave Network.
“This ensures lower prices for these key services, and ultimately less cost for taxpayers, while allowing Motorola to invest in the network to ensure that quality and safety are maintained.”
In our decades of operating nationwide public safety networks around the world, we have not seen anything like this. Motorola Solutions spokesman
The Airwave Network was set up through Home Office procurement in 2000. The original contract was to run until 2019 or 2020 when it was expected to be replaced by a new system using a commercial 4G mobile network. But the new system was delayed and is not expected to come online until 2029, leaving Airwave with a continued monopoly.
The CMA said it opened an investigation into mobile radio network services In October 2021 amid concerns that the market might not be working well.
The watchdog said that UK emergency services currently have no choice but to continue using Motorola’s Airwave Network, due to a lack of alternative providers.
In a statement after the ruling, a spokesman for Motorola Solutions said: “Motorola Solutions strongly disagrees with the Competition Appeal Tribunal’s decision.
“It is highly concerning that a regulator can be allowed to tear up, mid-term, a negotiated and mutually agreed binding contract – even more so one with a sovereign government.
“We believe this unprecedented overreach will have a chilling effect on long-term investment and contracting with the UK Government.
“In our decades of operating nationwide public safety networks around the world, we have not seen anything like this.
“Motorola Solutions remains committed to vigorously protecting its contractual position and we are considering all options, including our intent to appeal the decision to the Court of Appeal.”
