Airwave a 'license to print money' on legacy blue-light comms contract
- Reference: 1696422307
- News link: https://www.theregister.co.uk/2023/10/04/airwave_profits/
- Source link:
The Motorola-owned business is at the center of controversy in the UK after the Competition and Markets Authority (CMA) estimated it could make nearly £1.3 billion ($1.6 billion) in excess profits [1]over a decade owing to its position as a supplier of the legacy network Airwave, which is set to be replaced by the Emergency Services Network (ESN), a project Motorola has also been involved in.
The [2]latest figures released by the company – which supports the existing "TETRA" network used by police, fire, ambulance, and other services – show revenue rose to £463.4 million ($561.8 million) for the year ending December 2022, up from £437.8 million a year earlier. Profit rose to £176.8 million ($214.3 million) from £162.7 million the prior year.
[3]
The CMA has said Airwave's market position gave it the "ability to price services above levels the CMA would expect to prevail in a competitive market and results in a detrimental effect on customers."
[4]
[5]
It has proposed charge controls to limit the price by more than 40 percent. However, Airwave took the issue to the Competition Appeal Tribunal. The first hearing took place in early August, with a ruling to follow.
[6]'There has never been a realistic plan' for UK's £11B Emergency Services Network
[7]Excess profits on Motorola's Airwave estimated to be £1.3B
[8]Up to £895M up for grabs in UK Emergency Services procurement
[9]UK emergency services take DIY approach amid 12-year wait for comms upgrade
To prevent the CMA from forcing it to sell Airwave, Motorola walked away from its £400 million ($485 million) contract for ESN in November 2021. The Home Office is going through procurement to replace Motorola on Lot 2 of the contract and expects to appoint a new supplier in 2024.
ESN is set to [10]cost around £11 billion ($13 billion). It was initially expected to be up and running by 2019, but has suffered a series of delays and is now [11]expected to be in place by 2029 . The government argued that Motorola [12]benefited from delays to ESN because it also provided the legacy system.
IT research company Megabuyte said the financial results showed Airwave was a "license to print money," boosted by its approach to cost indexation.
[13]
The analyst firm pointed out that the results could yet improve if the company wins its appeal against the CMA ruling. "It could generate as much again if all parties are correct in their assessment of when the replacement ESN might actually be ready," Megabuyte said. "The biggest scandal in all this is, of course, that the ESN is still nowhere near ready despite having consumed £2 billion in public funding, plus the excess costs of maintaining the Airwave contract."
Motorola has been offered the opportunity to respond. ®
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[1] https://www.theregister.com/2023/05/22/excess_profits_motorola_airwave/
[2] https://find-and-update.company-information.service.gov.uk/company/03985643/filing-history
[3] 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=2ZR2MI7n53V2XZ5B2jKUjhAAAANc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] 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=44ZR2MI7n53V2XZ5B2jKUjhAAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] 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=33ZR2MI7n53V2XZ5B2jKUjhAAAANc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/07/14/pac_emergency_services_network/
[7] https://www.theregister.com/2023/05/22/excess_profits_motorola_airwave/
[8] https://www.theregister.com/2023/05/18/home_office_launches_895_million/
[9] https://www.theregister.com/2023/04/28/uk_esn_alternatives/
[10] https://www.theregister.com/2023/04/06/emergency_services_network_2029/
[11] https://www.theregister.com/2023/07/14/pac_emergency_services_network/
[12] https://www.theregister.com/2022/05/10/motorola_airwave_esn_profits/
[13] 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=44ZR2MI7n53V2XZ5B2jKUjhAAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://whitepapers.theregister.com/
Re: Legacy is the new work for working...
All of that could be done but surly the lessons here are:
1. Don't get locked in with a supplier.
2. Don't then sign a contract to replace the locked in system with a new one which also involves the supplier you claim to be unhappy with.
3. Don't faf around with changing and poorly thought out requirements until you're years late and over budget. We're not the only country in the world with emergency services so do what the others are doing where it works, it keeps costs down and makes implementation simpler and faster.
4. When you've made a big effort to screw up all of the points above don't come crying and pointing at the supplier, it's your fault you idiots!!!!
Re: Legacy is the new work for working...
1 - Wouldn't be an issue if we hadn't created it as a PPP rather than the national infrastructure it is.
3 - That's the biggest screwup, though avoiding also means spending inordinate sums on "up front consultation"
The biggest thing here is that there was always a clear way to phase the ESN, such that it would be of benefit at each stage.
Re: Legacy is the new work for working...
The thing is, if you split this up into manageable chunks then the job is actually quite easy to deliver.
If you just want encrypted data to mobile vehicles then there is a range of solutions. From 3G etc, plus a VPN to secure the traffic to Starlink etc if really required for data to the vehicle.
The UK has 142145 full time equivalent police. Assuming that each one has their own personal police car (unlikely, but for sake of argument...) then at £450 full retail price for a starlink terminal it'd cost £64 million quid to buy every single one a starlink terminal for their vehicle, and you'd assume that you could get a bulk discount with that sort of volume. Add a toughbook at £3k each and that's another £426 million, which delivers a working system now at rather less than half a billion, which is £1.5 billion cheaper than the last failed effort.
In addition, having watched a few minutes of varying police reality shows in the UK it looks very much like individual forces have got fed up of waiting and have just put their own data systems in place, so presumably the problem is that the national system is competing with the individual forces efforts at providing their officers with the tools to do their jobs.
If that is the case, then just stop trying and leave them to it because they are obviously doing a better job than the national programme.
Re: Legacy is the new work for working...
Depends on your definition of working really. You've spent 25% of the existing project, assumed that you don't need to pay the £10m per month subscription fee, and you've solved the problem for stationary officers that are in their cars and have line of sight to the sky.
If we're talking about only solving part of the problem then equip them all with dual SIM phones that the car kit hot spots off. 2x unlimited SIMs on different networks.
Significantly cheaper and technically more reliable and useful than Starlink. Not to mention not having to deal with a CEO who has a history of disconnecting people he doesn't agree with.
Both of these plans fall down in actual emergencies though
They get you with the free iPhone
Then add it to the monthly bill for ever
I never get tired of saying it
Come on, you all should know this by now:
So how's that cloud thing working for ya?
"license to print money,"
ALL Government contracts - whether central or local - are a license to print money, always have been, always will be. £11 million? That's rookie numbers.
Legacy is the new work for working...
Get the ESN built for *data*, supply vehicles with high speed data.
Then add on personal data, on commodity hardware, as an "extra" - alongside the tetra radio for actual reliable and versatile comms.
Then look at whether someone can make something that is appropriately robust to offer an alternative for the vox radio.
And continue to look at upgrading the robustness of the data terminals as needed.