Motorola Solutions (NYSE: MSI) is a long-time supplier of land mobile radio (LMR) communications devices and radio systems for public safety and commercial/industrial applications. In an era of cellular broadband mobile radio, you might think that LMR radio use is being phased out. On the contrary, Motorola Solutions Chairman and CEO Greg Brown, at recent investor conferences, reiterated that he is bullish about the company’s future in the critical-communications space, pointing out the enduring demand in the company’s LMR business in providing private-radio solutions to public-safety agencies and commercial organizations, Urgent Communications reported.
“Land mobile radio is the anchor tenant—that’s what the residual identity of the company is—but why am I optimistic about that?” Brown said. “Number one, the durability and predictability of that as a line of business, and I don’t see it being displaced or replaced. We have contracts that run through 2035, 2037, and we’re in conversations right now on a multi-services deal through 2041. So, LMR is here to stay.”
LMR radios, sometimes referred to as ‘walkie-talkies’, operate in the VHF (30-300 MHz), UHF (450-470 MHz) and industrial use 800 MHz and 900 MHz bands. Brown acknowledged that while the LMR market may only be growing at single-digit rates, he said that Motorola Solutions has broadened its approach with customers with more services and solutions that allows the company to maintain profit margins.
“We have 13,000 LMR networks—the majority are enterprise, not public safety,” Brown said. He points out that a combination of deploying a network of base stations that connect to a large base of devices and supported by command center services offers a long growth path for the company, notes Urgent Communications.
“We used to sell iron [hardware], and that was it,” he said. “We now have a services business that is $2 billion-plus [in annual revenue] and very healthy. We are much more strategic and thoughtful around monetizing … bronze-, silver- and gold-level services. We’re much more thoughtful on the terms and conditions of cost-of-living increases, so we’re not going to bear the burden in an inflationary environment unnecessarily.”
Brown said he is encouraged by the adoption of Motorola Solutions subscriber devices, noting that he believes that customers “are in the early innings of refresh” of LMR mobiles and portables.
“You replace your smartphone maybe now every three years,” Brown said. “The replaceability of a public-safety radio is about seven years, and we have now launched the best radio we’ve ever had in APX NEXT for primarily North American P25 subscribers.” He adds that the company has new TETRA radio for international markets, and a new radio for commercial users around PCR—professional commercial radio.
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