“Research In Motion Ltd., maker of the BlackBerry smart phone, faces increasing challenges to its overseas expansion as developing countries tighten restrictions on mobile e-mail.
‘It’s a reflection of fears of cyber-security and espionage that now extend to mobile phones,’ said Ron Deibert, director of the University of Toronto’s Citizen Lab, who helped colleagues uncover a plot against the Indian government that involved computers in China. ‘It’s the type of thing that will become more common for RIM as they grapple with public policy and ethical issues in emerging markets.'”
Research In Motion Ltd., maker of the BlackBerry smart phone, faces increasing challenges to its overseas expansion as developing countries tighten restrictions on mobile e-mail.
The United Arab Emirates, home to Middle East business hub Dubai, said Sunday it may suspend BlackBerry e-mail services in October because of concern the devices could be used in crimes. The move comes days after an official in India said that country may ban BlackBerry e-mail use and reports that Saudi Arabia could take similar steps.
“It’s a reflection of fears of cyber-security and espionage that now extend to mobile phones,” said Ron Deibert, director of the University of Toronto’s Citizen Lab, who helped colleagues uncover a plot against the Indian government that involved computers in China. “It’s the type of thing that will become more common for RIM as they grapple with public policy and ethical issues in emerging markets.”
Research In Motion, based in Waterloo, Ontario, is focusing on countries including India, the United Arab Emirates, Indonesia and Brazil as a decade of North American expansion slows. Revenue from outside North America rose to 37 percent of Research In Motion’s $15 billion in revenue in the last fiscal year, up from 23 percent in the fiscal year ended February 2005.
For Research In Motion, the pioneer in handheld e-mail devices, security is one of the main advantages it touts over competitors. E-mails its customers send are encrypted and sent through Research In Motion’s own servers and network operation centers, with much of the equipment located in Canada. That security has made BlackBerrys popular with companies and government officials including President Obama, who kept his BlackBerry after taking office.
However, the system also makes it harder for governments to monitor BlackBerry communications than messages from other smart phones, which typically travel across the Internet. That has made Research In Motion’s devices an issue for countries concerned that mobile e-mail or messaging could be used to coordinate a terrorist attack or bring down a government.
“RIM respects both the regulatory requirements of government and the security and privacy needs of corporations and consumers,” the company said in a statement. “RIM does
not disclose confidential regulatory discussions that take place with any government.” In a separate statement for corporate customers, Research In Motion said each company’s e-mails are encrypted with a unique key and even Research In Motion can’t decode such messages.
In the United Arab Emirates, where customers can buy Swarovski-crystal encrusted BlackBerry phones and leather Montblanc carrying cases, the government said it will suspend services it can’t monitor because of the potential for illegal use, according to a statement. BlackBerry’s Messenger, e-mail and Web browsing services will be halted from Oct. 11, the Telecommunications Regulatory Authority said. Business travelers and other foreign visitors will also be affected, the agency said.
“Security concerns trumped commercial considerations,” Eckart Woertz, who manages the economics program at the Dubai-based Gulf Research Center, said of the decision. “They want to control ongoing telecommunications but can’t because of the way BlackBerry manages its data offshore.”
The decision means a “few hundred thousand” BlackBerry users in the United Arab Emirates’ $8.2 billion telecommunications market may have to look for alternative services, Shuaa Capital PSC’s Simon Simonian said.
“The BlackBerry has become an indispensable tool,” telecommunications analyst Simonian said. “Corporate users will have to migrate and find another data plan.”
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