- Motorola Solutions, Inc (NYSE:MSI) gouged the U.K.’s Home Office for its emergency service radio network, which ultimately the taxpayers paid, the Competition and Markets Authority said.
- Motorola could make an excess profit of £1.1 billion ($1.2 billion) between January 2020 and December 2026 from its U.K. emergency services contract via its monopoly position, warned the CMA, Bloomberg reports.
- If the delay in rolling out a new network continues, it could make a further £160 million excess profit annually after 2026.
- The watchdog recommended imposing price controls on the telecom network to restrict how much it can charge.
- Motorola’s Airwave Network has run the secure mobile system for the U.K.’s police and ambulance services since 2000.
- The old network was due to be shut down by 2019. However, delays to the launch of the new system, partly due to Motorola’s technology-related issues, extended the life of Airwave.
- The contract was extended until 2026 or later.
- The CMA was concerned about Motorola’s double role in providing the current network and helping deliver the replacement network. Motorola acquired Airwave in 2016.
- The CMA said the Airwave Network accounts for around 7% of Motorola’s global revenues and about 21% of its pre-tax profits.
- Motorola denied the allegations.
- In 2021, the CMA had warned against a full investigation against Motorola, even compelling it to sell the Airwave after raising antitrust concerns.
- Price action: MSI shares traded lower by 3.13% at $218.32 on the last check Friday.
