No More BlackBerry in UAE

Analysts outline difficult resolution to UAE ban for BlackBerry manufacturer RIM

Moves by two Gulf states to limit the use of certain BlackBerry applications will force manufacturer Research In Motion (RIM) to reassess its operations in the region, analysts have warned.

Saudi Arabia and the UAE have announced plans to limit some services, notably email, web browsing and messenger services. In the UAE, the Telecommunications Regulatory Authority (TRA) said certain BlackBerry services allow users to act without any legal accountability, causing judicial, social and national security concerns for the UAE.

BlackBerry services operate outside regulation introduced in the UAE in 2007 by transmitting data out of the country to a commercial organisation.

TRA director general Mohamed Al Ghanim said: “As of October 11, Blackberry messenger, Blackberry email and Blackberry web browsing services will be suspended until an acceptable solution can be developed and applied.”

Gartner analyst Carolina Milanesi said RIM has faced this issue before in other markets where there is a high level of government control, principally in Russia where it had to get clearance to operate because the Russian government didn’t like the way it encrypted and handled data.

This required RIM to agree to an arrangement on the way it routed and handled data in the country.

IHS Global Insight Middle East and North Africa analyst Shardul Shrimani said a similar agreement could be a way for RIM to overcome its new issues in the Middle East, perhaps installing BlackBerry servers in the area.

However, he said there is a genuine risk that the situation could snowball as other countries in and around the UAE look at the decision and decide whether to impose their own stipulations on BlackBerry use.

This could make any resolution an expensive option for RIM, both in terms of capex and damage to its customer base as some users defect to other handsets and systems to avoid losing services.

“Halting services will be very detrimental to BlackBerry. RIM needs to negotiate with the regulators to allow them access to its servers. This needs to happen quickly otherwise existing customers will switch and the damage will be done.”

Ovum principal analyst Tony Cripps said RIM may even consider pulling out of troublesome markets as its key clients remain governmental and financial organisations, which demand the type of security that would be undermined by conceding to local regulatory requirements in the Middle East.

Cripps said: “The BlackBerry architecture is optimised for security, but it is now being asked to remove this service.

“One idea is that RIM might give up on these markets so it doesn’t lose its key customer markets.”