The United Arab Emirates will not suspend Research in Motion Ltd. ’s Blackberry service this month. Photographer: Jonathan Gainer/Bloomberg 
Oct. 8 (Bloomberg) -- Bloomberg's Betty Liu reports on the latest breaking news and top stories in today's Business Briefs. (Source: Bloomberg) Research In Motion Ltd. averted a ban on its BlackBerry smartphone in the United Arab Emirates after the country’s phone regulator said the company’s messaging services now comply with local regulations.
“All BlackBerry services in the U.A.E. will continue to operate as normal,” the Telecommunications Regulatory Authority, which had threatened to ban the service over security concerns, said in a statement on its website today. The regulator didn’t give further details of how the company and local wireless operators addressed the government’s concerns.
RIM said today it continues to follow the principles for working with government officials it laid out in an Aug. 12 statement and wouldn’t comment further on confidential regulatory matters. In that statement, RIM said it doesn’t do “special deals for specific countries” and there have been no changes to the security of its corporate e-mail system.
“Contrary to any rumors, the security architecture is the same around the world and RIM truly has no ability to provide its customers’ encryption keys,” RIM said in August.
RIM’s encryption technology has raised concerns in several countries that BlackBerry may be used for terrorist attacks or other illegal activity. The U.A.E. regulator’s decision, which averts a ban planned for Oct. 11, comes after Saudi Arabia canceled a planned shutdown of BlackBerry service and the Indian government said it would push back a deadline to suspend BlackBerry service as it works toward a solution.
Some Kind of Workaround?
“RIM has previously been clear that it would not change the architecture of the BlackBerry services to placate countries,” said Tony Cripps, an analyst with technology research firm Ovum in London. “We can only hypothesize that some kind of workaround has been agreed” to between the UAE and local carriers to monitor messages sent with the BlackBerry “at a point in the delivery process that is outside of RIM’s control,” he said.
RIM rose $1.44, or 3 percent, to $49.36 at 4:30 p.m. New York time in Nasdaq Stock Market trading. The stock has dropped 27 percent this year.
The U.A.E. regulator said it wants to acknowledge RIM’s “positive engagement and collaboration.” The regulator didn’t say whether the deal allows it to monitor messages sent by BlackBerry users.
In a Sept. 24 interview, co-Chief Executive Officer Jim Balsillie said RIM can’t give governments access to corporate customers’ e-mail systems because only those customers -- not RIM -- hold the security codes for reading their employees’ BlackBerry messages.
“I’m not the keeper of that key, I don’t have that key,” he said. “If you want them to break open their servers, you’ve got to go to them.”
Indian Security Trial
Saudi Arabian authorities said Aug. 10 it wouldn’t impose a BlackBerry ban, citing the “positive development” in meeting the country’s monitoring needs. India’s government said Aug. 31 that it’s conducting a two-month test of a tracking system offered by Waterloo, Ontario-based RIM.
A ban would have hurt the image of the U.A.E., home to the business hub of Dubai, as place that is business-friendly, said Mohammed Ali Yasin, chief investment officer at CAPM Investments in Abu Dhabi.
“The fact that we are continuing with the services is important to say we are part of the world community,” he said.
The companies involved would have lost “significant business” if the ban had gone through, he said.
Encryption Technology
Emirates Telecommunications Corp., the U.A.E.’s biggest phone operator, known as Etisalat, and Emirates Integrated Telecommunications Co., based in Dubai and owner of the Du brand, had introduced packages that would allow customers to replace BlackBerry devices with smartphones offering similar services.
Etisalat said in an e-mailed statement today that its alternative packages will no longer be available and that all its BlackBerry services will continue to operate as normal. Du said in a separate statement that service for both consumer and enterprise customers will function normally.
An Etisalat official who declined to be named said he did not know about any possible monitoring and referred questions to the regulator. “We only provide the service,” the official said. Calls to a Du official went unanswered today, the first day of the weekend in the U.A.E.
The U.A.E. set the Oct. 11 shutdown deadline in August after the regulator said the encryption technology didn’t comply with national-security laws for giving authorities access to electronic messages.
RIM has about 1.1 million users in India and a combined 1.2 million in the U.A.E. and Saudi Arabia, according to estimates by RBC Capital Markets analyst Mike Abramsky. The company has over 50 million subscribers globally.
To contact the reporters on this story: Zahraa Alkhalisi in Abu Dhabi at zalkhalisi@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net: Peter Elstrom at pelstrom@bloomberg.net
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