A major Home Office contract to upgrade the communications tools used by the emergency services has been hit by the withdrawal of one of only two bidders, it has emerged.

According to the Financial Times, telecoms firm O2 notified the Home Office on Friday that it would be withdrawing from the competition to run the new Emergency Services Network, which seeks to replace the two-way radio network currently used by emergency services staff with state-of-the-art 4G data and voice services.

O2's withdrawal – which the FT reports is because of uncertainty over the telecoms firm's future ownership structure – leaves EE as the last company standing in a process described by ministers earlier in the year as promising "intense competition" leading to "significant cost savings" for taxpayers.

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Current supplier Airwave Solutions, and two other firms – UK Broadband Networks and Vodafone – withdrew from the bidding process in February after the Home Office evaluated an initial round of bids.

The ESN model is split into three lots, with lot three – which seeks "a resilient mobile services network for the police, fire and rescue and ambulance services" – forming the main part of the new network. It is this lot which has suffered the withdrawal of O2 and which will now go forward with just one bidder.

A Home Office spokesperson stressed that bidding for the other two lots – covering "delivery" and "user services" – remained competitive.

"O2 Telefónica’s decision to withdraw, for commercial reasons, from the procurement process to provide the UK with a new emergency services communications network is disappointing," they said.

"However, the process to establish a more effective, flexible and affordable network for the UK’s police, fire and ambulance services will continue. Procurement remains extremely competitive and will deliver value for money to the taxpayer irrespective of O2 Telefónica’s decision to withdraw.

"Seven other bidders remain in the running for the main contracts and we look forward to receiving their best and final offers in June. We hope to sign contracts later this year."

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