Airwave emergency communications company profits rise as investigation continues • The Register
Airwave, the company behind the legacy data and voice network believed to be gone for UK emergency services, is on track for projected profits of £ 1.2bn for the extension period of technology.
The current Airwave system – which uses TETRA Radio technology (Terrestrial Trunked Radio) – was to be replaced by the 4G-based Emergency Services Network (ESN) in 2019. Although, as The register Foresightedly noted, this would happen as the monkeys fly off our butts, and indeed, as of 2019, no tipping. Airwave will be in use until 2026.
As we previously revealed, Motorola Solutions, which acquired Airwave in early 2015, the existing radio system halfway between a cell phone and a walkie-talkie, also has a stake in ESN, which will use LTE. push-to-talk solution. (If using a 4G-based replacement is really a good idea, that’s a whole different topic.)
In the results published on Companies House for the fiscal year ended December 31, 2020 [PDF], Airwave reported an operating profit of £ 192million, up from £ 198million a year earlier, which roughly matches the profit projected by the Competition and Markets Authority (CMA) in July of this year.
August 26, 2019: London Metropolitan Police officers with Airwave handsets strapped to their chest (click to enlarge)
Profit after tax was £ 158million from £ 159million a year earlier, while revenue was up 2.1% to £ 433million. Dividends of £ 120million were also revealed in the results.
Motorola won one of the key contracts for ESN in 2015 before finalizing the purchase of Airwave Solutions. The acquisition was cleared by the CMA at the time because the government planned to shut down Airwave by 2019. Several months ago, the watchdog began to consider an investigation into the contract when it was became clear that Airwave, after several extensions, would not once again go anywhere.
When consulting on a market investigation proposal, the watchdog said: “Government officials and other stakeholders – particularly the [public spending watchdog] National Audit Office and [Parliamentary spending watchdog] the Public Accounts Committee – expressed concern about Motorola’s position and incentives to provide ESN, given the continued high profitability of the Airwave network. “
The CMA has said Motorola could make excess profits of around £ 1.2bn between 2020 and 2026 – a cost that will ultimately fall on the UK taxpayer.
In its results, Airwave said: “The directors cooperated with the CMA in their consultation regarding the proposed MIR. Directors are aware of the possibility that the consultation may lead to a market investigation referral and that… The CMA requires corrective action as set out in the CMA consultation document.
Commenting on Airwave’s results, Philip Carse, chief analyst at Megabuyte, said: “The Airwave investigation now involves closing the stable door after the horse has locked itself. The 2020 accounts show another year. prodigious cash flow aided by indexed price hikes. Including this year’s dividend so far … we estimate Motorola has now extracted just over £ 800million in dividends from the price of ‘£ 764million purchase plus unspecified intercompany charges for’ strategic support ‘and similar items which were referenced in last year’s accounts.’
ESN was designed to provide a new mobile voice and data network for police, ambulance and fire departments. The project started in 2011, contracts were awarded in 2015, and it was due to be commissioned in 2017, but underwent a complete overhaul in 2018 and has since undergone a ‘mindset reset’, adding £ 1bn in costs and a further two-year delay, Home Office boss Matthew Rycroft told Parliament’s public accounts committee last year.
Joanna Davinson, head of digital, data and technology at the Home Office, also told PAC MPs in September last year that “a year behind the legacy set is in the order of £ 550 million “.
Davinson has since been appointed executive director of the UK government’s Central Digital and Data Office. ®