Motorola Solutions expects to extend Airwave contract by five years or more
Written by: Sam Fenwick | Published:
Greg Brown, Motorola Solutions’ CEO

​During a conference call to discuss the company’s 1Q18 results, Greg Brown, Motorola Solutions’ CEO, said that “…we now believe the Airwave contract will be extended by five or more years,” due to “ongoing, active and productive” discussions.

He also said that “we would look to finalise the agreement either this quarter or next quarter.”

A Home Office spokesperson said: “This a complex project which will provide the emergency services with the most advanced communications system of its kind anywhere in the world.

“As we have previously said, the Emergency Services Network programme is under review. The review is ongoing and no decisions have been made.”

The Home Office’s Emergency Services Mobile Communications Programme, which is working to replace the Airwave TETRA network with the Emergency Services Network (ESN) – which will use EE’s commercial mobile network in combination with a dedicated core for public safety use and additional sites that are being built under the Home Office’s Extended Area Services (EAS) project – has been hit by multiple delays since the initial contracts were signed with EE, Motorola Solutions and KBR in 2015.

At present, there is no visibility on ESMCP’s current timetable, although this expected to change this summer once a review of the programme has been completed (see our coverage of the announcement here).
Earlier this year, Motorola Solutions and Vodafone signed a contract that requires Vodafone to provide an IP-based replacement for the TDM service it is looking to withdraw in March 2020 and this will enable the Airwave network to continue operating while the TDM service is being retired.

Turning to Motorola Solutions’ 1Q18 results, it reported a 15 per cent increase in sales from 1Q17, of which roughly $49 million was related to acquisitions.The company’s GAAP operating margin fell by 1.9 percentage points to 11.6 per cent, reflecting “higher transaction costs related to acquisitions and a $52 million collection of a legal judgement in the prior year, offset by higher sales volume and higher gross margin.”

Operating cashflow was -$500 million, compared with the $142 million generated in 1Q17, due to “a $500 million debt-funded U.S. pension contribution, higher cash tax payments, higher incentive payments and a $52 million collection of a legal judgement in the prior year offset by lower capital expenditures associated with the company's ERP implementation in the prior year.”

Motorola Solutions is currently expecting revenue for 2018 as a whole to grow by approximately 14 per cent year-on-year.

Greg Brown's comments were sourced from a Seeking Alpha transcript of the conference call which can be viewed here

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