Motorola Solutions asked the United Kingdom (UK) competition regulator to abandon proposed price-control measures on the Airwave TETRA network that serves UK public-safety agencies, instead calling for the UK government to replace LTE-based Emergency Services Network (ESN) via a “technology-neutral” procurement.

Motorola Solutions made the request in its most recent response to the Competition and Markets Authority (CMA), which is scheduled to release the final decision from its investigation of LMR vendor giant’s work as the owner and supplier of the Airwave system. Claiming that Motorola Solutions has used its market dominance to realize “supernormal” profits from Airwave, the CMA has proposed implementing price controls that would cost Motorola Solutions more than $1 billion in projected revenues during the next four years. The CMA plans to release its final decision from the investigation next month.

But Motorola Solutions notes that the underlying problem with the UK public-safety communications market is not the pricing of the Airwave TETRA system but the failure of the UK Home Office to deliver the ESN, which was supposed to replace Airwave at the end of 2019. Current schedules call for the ESN to be ready at the end of 2026, but filings from both Motorola Solutions and the UK Home Office indicate that the ESN transition may not be completed until 2029 or later.

“ESN is the reason for the market investigation and should be considered the problem, not the potential solution,” Motorola Solution states in a response the CMA that was released last Friday.

With this in mind, Motorola Solutions recommends that the UK government procure a future public-safety communications system. Instead of mandating that the new system leverage 4G/5G technology—the model pursued with the ESN initiative—the bidding process should be a “technology-neutral open tender,” according to the Motorola Solutions filing to the CMA. This would allow Airwave to compete for the public-safety business.

“There is no reason for the CMA to avoid allowing competition to function effectively by way of a retender for the market, avoiding the mistakes that were made in respect of ESN,” the Motorola Solutions response states.

“Put simply, no ‘remedy’ is required other than a fair procurement process for the relevant market.”

As further evidence of the need for the ESN to be rebid on a technology-neutral basis, the Motorola Solutions response notes that the prime reason for transitioning from the Airwave TETRA network to an LTE-based ESN was to save the UK taxpayers’ money. However, that no longer appears to the be the case, as the “whole-life cost of ESN is reported to be £12 billion—the same as the cost of continuing to use Airwave,” according to the Motorola Solutions filing.

In the meantime, Motorola Solutions asserts that the UK government should honor the terms of the four-year Airwave contract extension covering 2023 through the end of 2026.

“The CMA must not interfere with the remaining term of the PFI Framework Agreement to December 2026 prior to the outcome of the new tender process, when such agreement has clearly worked extraordinarily well,” according to the Motorola Solutions response. “To do so would create serious and, in light of the economic evidence, wholly unjustifiable risk of destroying the credibility of any proposed future tender process by the UK government after December 2026.”

If adopted, this proposal would have significant ramifications for Motorola Solutions, which recently discloses in its SEC 10-K filing that the company’s largest customers are the U.S. government and UK government—each of which accounted for 7% of the company’s overall 2022 revenue. The SEC filing does not disclose how much of the UK government revenue comes from Airwave, but Airwave is acknowledged to be the largest contract with the nation.

But those UK-government revenue figures could be in jeopardy. Motorola Solutions already has announced that it will exit its role as part of the ESN vendor group, and the CMA has proposed that the company’s contracted Airwave revenue be reduced by more than 50%. In addition to losing previously contracted revenues, most industry sources believe Motorola Solutions’ public-safety communications opportunities in the UK could be limited in the future.

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 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.