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Business News

Telecom giants in position for £1bn ambulance chase

The biggest corporate names in telecoms and technology are believed to be eyeing up a £1bn deal to provide secure radio networks for the emergency services.

Airwave, owned by Australia's Macquarie, built and runs the communications network that allows ambulance drivers, firemen and police to contact hospitals, stations and colleagues quickly and safely through secure handsets.

Airwave won these various emergency services deals at different times, but has held all of them since 2005. That meant for the first time the 'blue light' services were able to communicate through the same system, while in 2011 the network coped with 16,000 police officers on duty during the London riots.

However, these contracts come to an end between 2016 and 2022, so the Home Office has started talks with industry over the shape of future deals. It is understood that the likes of Vodafone, O2, EADS subsidiary Cassidian, Capita, and Motorola – which already provides huge numbers of handsets to Airwave - have all been contacted in what is known as "soft market testing".

This is a Government exercise that takes place before an official selection process to ensure that there is sufficient interest in a contract. Officials are understood to be examining whether to let just one big contract to cover all of the 999 services, or run separate bidding processes.

Macquarie's Airwave is almost certain to bid again and is riding high having also been responsible for London 2012's private mobile radio communications. Airwave has also ensured that the emergency services have been able to contact each other in the London Underground since 2010.

An industry source said that the bidding process is likely to start before the end of the year.

However the contracts are carved up, two sources said that the overall value would add up to around £1bn, probably over a decade.

An Airwave spokeswoman said: "Airwave has several separate contracts with the Home Office to provide critical communications services. These are due to expire over a six year period from 2016."