Competition watchdog? We've heard of it. But emergency comms firm still on track to Airwave hello to £1.2bn
(2021/10/05)
- Reference: 1633422611
- News link: https://www.theregister.co.uk/2021/10/05/airwave_2020_results/
- Source link:
Airwave, the company behind the supposed-to-be-defunct legacy data and voice network for the UK emergency services, is on track for projected profits of £1.2bn for the technology's extension period.
The current Airwave system – which uses [1]TETRA (Terrestrial Trunked Radio) radio tech – was due to be replaced by the 4G-based Emergency Services Network (ESN) in 2019. Although, as The Register presciently [2]noted , that would happen when monkeys flew out of our butts, and indeed, as of 2019, no switchover. Airwave will be used until 2026.
As we've previously revealed, Motorola Solutions, which acquired legacy halfway-between-a-mobile-phone-and-a-walkie-talkie radio system Airwave in early [3]2015 , also has a stake in the ESN, which will use an LTE push-to-talk solution.
[4]
In results posted on Companies House for the financial year to 31 December 2020
[7]
August 26th 2019: London Metropolitan police officers with Airwave handsets strapped to their chests (click to enlarge)
Profit after tax was £158m compared with £159m a year earlier, while turnover was up 2.1 per cent to £433m. Dividends of £120m were also revealed in the results.
Motorola won one of the key contracts for ESN in 2015 before finalising its purchase of Airwave Solutions. The acquisition was cleared by the CMA at the time because the government expected Airwave to be shut down by 2019. Several months back, the watchdog began considering a [8]probe of the contract when it became clear Airwave, after [9]several extensions, once again would not be going anywhere.
[10]
[11]
In its consultation over a proposed market investigation, the watchdog said: "Government officials and other stakeholders – in particular the [public spending watchdog] National Audit Office and [Parliamentary spending watchdog] the Public Accounts Committee – have expressed concerns regarding Motorola's position and incentives to deliver ESN, given the ongoing high profitability of the Airwave network."
The CMA said that Motorola could stand to make excess profits of about £1.2bn in the period from 2020 to 2026 – a cost that will ultimately fall to the British taxpayer.
[12]
In its results, Airwave said: "The directors have co-operated with the CMA in its consultation in relation to Proposed MIR. The directors are aware of the possibility that the consultation may lead to a market investigation reference and that… may lead to the CMA requiring corrective action as set out in the CMA’s consultation document.”
Commenting on Airwave’s results, Philip Carse, chief analyst at Megabuyte, said: "Investigating Airwave now really is a case of shutting the stable door after the horse has bolted. The 2020 accounts show another year of prodigious cashflow aided by index-linked price rises. Including this year's dividend so far... we estimate that Motorola has now extracted just over £800m in dividends versus the £764m purchase price plus unspecified intercompany charges for 'strategic support' and such like that were referenced in last year's accounts."
[13]UK competition watchdog sniffing around Motorola profits after delay to replace company's Airwave service
[14]Emergency services 4G by 2020? And monkeys could fly out of my butt
[15]UK.gov won't Airwave bye for another 3 years, plans to phase in ESN services
[16]UK celebrates 25 years of wasteful, 'underperforming' government IT projects
[17]EE and Three mobe mast surveyors might 'upload some virus' to London Tube control centre, TfL told judge
[18]'Mindset reset' contributes to £1bn extra costs and another delay – 2 years this time – for Emergency Services Network
ESN was designed to offer a new mobile voice and data network for police, ambulance, and fire services. The project began in 2011, contracts were awarded in 2015, and it was set to go live in 2017, but went through a complete revision in 2018 and has since had a "mindset reset", adding £1bn in costs and a further delay of two years, [19]Home Office boss Matthew Rycroft told the Parliament's Public Accounts Committee last year .
Joanna Davinson, chief digital, data and technology officer at the Home Office, also told MPs on the PAC in September last year that "a year's delay across the whole of the legacy estate is in the ballpark of £550m."
Davinson [20]has since been appointed executive director of the UK government's Central Digital and Data Office. ®
Get our [21]Tech Resources
[1] https://www.etsi.org/technologies/tetra
[2] https://www.theregister.com/2016/11/17/users_not_confident_in_emergency_services_network_timetable/
[3] https://www.theregister.com/2015/12/04/motorola_splashes_817m_on_airwave/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://find-and-update.company-information.service.gov.uk/company/03985643/filing-history/MzMxNDk4NDI4MWFkaXF6a2N4/document?format=pdf&download=0
[6] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[7] https://regmedia.co.uk/2021/10/04/shutterstock_airwave_met_officer.jpg
[8] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[9] https://www.theregister.com/2019/06/21/home_office_extends_motorola_contract_for_esn/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[14] https://www.theregister.com/2016/11/17/users_not_confident_in_emergency_services_network_timetable/
[15] https://www.theregister.com/2018/09/24/emergency_services_network_phased_approach_three_years_motorola/
[16] https://www.theregister.com/2021/07/23/nao_govt_it_projects/
[17] https://www.theregister.com/2021/06/09/mobile_mast_surveyors_virus_upload_silliness/
[18] https://www.theregister.com/2020/09/15/mindset_reset_emergency_services_network/
[19] https://www.theregister.com/2020/09/15/mindset_reset_emergency_services_network/
[20] https://www.theregister.com/2021/01/13/esn_boss_promotion/
[21] https://whitepapers.theregister.com/
The current Airwave system – which uses [1]TETRA (Terrestrial Trunked Radio) radio tech – was due to be replaced by the 4G-based Emergency Services Network (ESN) in 2019. Although, as The Register presciently [2]noted , that would happen when monkeys flew out of our butts, and indeed, as of 2019, no switchover. Airwave will be used until 2026.
As we've previously revealed, Motorola Solutions, which acquired legacy halfway-between-a-mobile-phone-and-a-walkie-talkie radio system Airwave in early [3]2015 , also has a stake in the ESN, which will use an LTE push-to-talk solution.
[4]
In results posted on Companies House for the financial year to 31 December 2020
[5]PDF
, Airwave recorded an operating profit of £192m up from £198m a year earlier, putting it roughly in line for the profit projected by the Competition and Markets Authority (CMA) [6]in July this year .[7]
August 26th 2019: London Metropolitan police officers with Airwave handsets strapped to their chests (click to enlarge)
Profit after tax was £158m compared with £159m a year earlier, while turnover was up 2.1 per cent to £433m. Dividends of £120m were also revealed in the results.
Motorola won one of the key contracts for ESN in 2015 before finalising its purchase of Airwave Solutions. The acquisition was cleared by the CMA at the time because the government expected Airwave to be shut down by 2019. Several months back, the watchdog began considering a [8]probe of the contract when it became clear Airwave, after [9]several extensions, once again would not be going anywhere.
[10]
[11]
In its consultation over a proposed market investigation, the watchdog said: "Government officials and other stakeholders – in particular the [public spending watchdog] National Audit Office and [Parliamentary spending watchdog] the Public Accounts Committee – have expressed concerns regarding Motorola's position and incentives to deliver ESN, given the ongoing high profitability of the Airwave network."
The CMA said that Motorola could stand to make excess profits of about £1.2bn in the period from 2020 to 2026 – a cost that will ultimately fall to the British taxpayer.
[12]
In its results, Airwave said: "The directors have co-operated with the CMA in its consultation in relation to Proposed MIR. The directors are aware of the possibility that the consultation may lead to a market investigation reference and that… may lead to the CMA requiring corrective action as set out in the CMA’s consultation document.”
Commenting on Airwave’s results, Philip Carse, chief analyst at Megabuyte, said: "Investigating Airwave now really is a case of shutting the stable door after the horse has bolted. The 2020 accounts show another year of prodigious cashflow aided by index-linked price rises. Including this year's dividend so far... we estimate that Motorola has now extracted just over £800m in dividends versus the £764m purchase price plus unspecified intercompany charges for 'strategic support' and such like that were referenced in last year's accounts."
[13]UK competition watchdog sniffing around Motorola profits after delay to replace company's Airwave service
[14]Emergency services 4G by 2020? And monkeys could fly out of my butt
[15]UK.gov won't Airwave bye for another 3 years, plans to phase in ESN services
[16]UK celebrates 25 years of wasteful, 'underperforming' government IT projects
[17]EE and Three mobe mast surveyors might 'upload some virus' to London Tube control centre, TfL told judge
[18]'Mindset reset' contributes to £1bn extra costs and another delay – 2 years this time – for Emergency Services Network
ESN was designed to offer a new mobile voice and data network for police, ambulance, and fire services. The project began in 2011, contracts were awarded in 2015, and it was set to go live in 2017, but went through a complete revision in 2018 and has since had a "mindset reset", adding £1bn in costs and a further delay of two years, [19]Home Office boss Matthew Rycroft told the Parliament's Public Accounts Committee last year .
Joanna Davinson, chief digital, data and technology officer at the Home Office, also told MPs on the PAC in September last year that "a year's delay across the whole of the legacy estate is in the ballpark of £550m."
Davinson [20]has since been appointed executive director of the UK government's Central Digital and Data Office. ®
Get our [21]Tech Resources
[1] https://www.etsi.org/technologies/tetra
[2] https://www.theregister.com/2016/11/17/users_not_confident_in_emergency_services_network_timetable/
[3] https://www.theregister.com/2015/12/04/motorola_splashes_817m_on_airwave/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://find-and-update.company-information.service.gov.uk/company/03985643/filing-history/MzMxNDk4NDI4MWFkaXF6a2N4/document?format=pdf&download=0
[6] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[7] https://regmedia.co.uk/2021/10/04/shutterstock_airwave_met_officer.jpg
[8] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[9] https://www.theregister.com/2019/06/21/home_office_extends_motorola_contract_for_esn/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YVwibpLfwaBi3zlu4FT4swAAABI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/07/08/motorola_airwave_cma/
[14] https://www.theregister.com/2016/11/17/users_not_confident_in_emergency_services_network_timetable/
[15] https://www.theregister.com/2018/09/24/emergency_services_network_phased_approach_three_years_motorola/
[16] https://www.theregister.com/2021/07/23/nao_govt_it_projects/
[17] https://www.theregister.com/2021/06/09/mobile_mast_surveyors_virus_upload_silliness/
[18] https://www.theregister.com/2020/09/15/mindset_reset_emergency_services_network/
[19] https://www.theregister.com/2020/09/15/mindset_reset_emergency_services_network/
[20] https://www.theregister.com/2021/01/13/esn_boss_promotion/
[21] https://whitepapers.theregister.com/
The right tool for the job
I still have not encountered a Conservative member of parliament who will answer the question which system would you rather have if your job description included "Meeting some of the most violent members of society and detaining them". Airwave has features that are superior to those touted for the 4G (aren't we on 5G these days?) replacement. For a start a big, friendly, emergency button that only needs to be held down to transmit a distress call. The person who needs help may speak but does not necessarily need to because the call alternates between send and receive, the operators are alerted to the call which has priority over all other traffic, and the operator can hear what's happening. The 4G alternative is "hang on, would you mind not beating me with a shovel while a make an emergency call. After I get this phone to start up and just as soon as my credentials have been verified."
Airwave also supports connection into command and control systems and displays the status of the user which can be changed by the user to show what they are doing. The C&C system then updates the information. It's all simple and rugged. The only failing with Airwave is that government did not take the option to fit their terminals with a SIM meaning that users must carry around a phone as well as Airwave.
The only issue here seems to be, yet again, those in government making poor policy, not funding it properly, and signing contracts that hand the supplier enormous amounts of cash.