Tjin is right. The article linked by bws48 says it was a digtital trunked radio system. The simple minded way to think of it is that the signal goes as digital packets from one radio to a computer (usually through a repeater), then back to the other radio. While there are many advantages of this sort of system, one big disadvantage is that both radios need to be able to "see" the computer. If either one can't, perhaps by being down in a tunnel, then they can't talk to each other. I don't know how difficult it would be to have enough repeaters in the subway tunnel system to make it work in the tunnels, but I suspect it would be expensive. I'm not a radio expert so there are probably other work arounds to make it function in the subways.

There are however many advantages of digital trunked radio systems, which is why it is becoming the standard for public safety agencies. The biggest advantage is to allow many users to operate on a limited number of discreet frequencies. This is very advantageous in a big city, where there are many, many hundreds of fire, police, and EMS responders all working at one time. Also the dispatcher can very quickly set up a "channel" specific to an incident. All the reponders to that incident (fire, police, EMS) can talk to each other, but not have interference from nor interfere with other communications in the surrounding area. The signals can be easily encrypted, which is particularly important for law enforcement.

These systems are still relatively new for many agencies, so one of the issues is symply finding out where they do and don't work. To some extent you can model where the repeaters will cover, but there are almost always some unexpected holes in the coverage.