2023-04-05 10:00:18 ET
The UK's antitrust watchdog will restrict how much Motorola Solutions ( NYSE: MSI ) can charge emergency services for access to its Airwave Network, a move that's drawing an appeal from the communications company.
The Competition and Markets Authority says that when it comes to Airwave - the mobile network that police, fire, ambulance and other emergency services uses to communicate - the market isn't working well, and services have no choice but to carry on using it after a replacement network wasn't ready on schedule.
That meant Motorola ( MSI ) has "held all the cards when it came to pricing" in negotiations, the CMA's Martin Coleman said .
Emergency services have been paying nearly £200M (about $250M) more per year than they should have since 2020, the CMA said. A new cap will be in effect until the end of 2029, with a review coming in 2026.
Motorola says the CMA's move alters a long-term contract that was "mutually agreed, duly executed and is still in effect," and that it will appeal the "unprecedented" decision .
“Motorola Solutions strongly disagrees with the CMA’s final decision and believes it cannot be justified on competitive, economic or legal grounds," the company said.
It argued that if Airwave was continued on the agreed terms until its end of life in 2026, "the Home Office will have enjoyed a better deal than it agreed to at the outset of the contract, and better terms than the U.K. government typically accepts even for non-mission-critical service contracts."
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UK regulator to cap Motorola's charges for emergency network