Why RIM Should Cut Its Losses in the United Arab Emirates Market

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The UAE has officially stated that as of October 11th, they will be cutting off BlackBerry services. The Telecom regulators have said that the fact that data is handled and stored offshore, outside of government control, makes BlackBerrys an unacceptable security risk.

For those who don’t know, the BlackBerry platform architecture relies on dedicated data centers (NOCs) which handle all BlackBerry data traffic over a secure, encrypted connection between the NOC and the handset. Some governments are uncomfortable with the solution because they have little or no visibility into BlackBerry data traffic, and are concerned that BlackBerry handsets may be used for criminal purposes.

Security is paramount for RIM as it allows them to sell to governments and armed forces around the world. The BlackBerry is the gold standard for enterprise security but it’s a double edged sword when selling to countries that want more visibility into what their citizens are doing.

The greater issue that is at hand is that security and a totally secure “pipe” is a key selling feature for BlackBerry. If RIM were to acquiesce to the UAE’s demands, it would significantly undermine its security credentials, particularly with business and public sector customers. If RIM were to allow the UAE access to BlackBerry communications, it would set off a chain of events that would lead other countries to demand similar access.

This is exactly why RIM should cut its losses with the UAE and perhaps all countries requiring the same amount of access. If RIM starts acquiescing to countries around the world, it’s almost guaranteed that it will lose its ability to sell itself as the premier smartphone for security and enterprise. The gains that RIM will make in the Middle East and Asia where governments are requiring more visibility will do more damage to their current markets where their revenues are based.

  • Sugoi6

    What are you talking about? Get informed before writing the article. I live in the UAE, UAE asked RIM to have a proxy in the UAE that is run by RIM to speed up the process if they need to tap on someone. They didn't ask for decryption keys. The reason, last year there was an assasination in a hotel in Dubai by Israeli spy that were using blackberrys. They asked RIM for the transcript which RIM obliged and sent them but it took one whole month.

    At the same time, US and UK and France have complete access to blackberrys. And there is two proxy servers for RIM, one in China and the other in India. China was going to ban RIM, until RIM backed out and built a server there. At the same time in 2008 in India, there was a terrorist in India involving blowing up hotels. The terrorists used Blackberrys which the government couldnt track. After the incident, RIM had to create a server there or they would have been banned.

    Please be aware, RIM backed out to China and India, the reason is ofcourse market share and a huge population.

    PS UAE have 500,000 blackberry subscribers. latest update is Saudi Arabia just stopped BBM and very closely will also ban rim (700,000 subscribers). And today it was announced Kuwait is also following the UAE.

  • Omarfk

    Fully Agree.

    I cant believe how naive people can be. People. Think about it. Do you think BB would exist without CIA/NSA/MI6/Mossad having access to the BB network whenever they want?

    It is just that the UAE want what other western intellgince agencies already have. They just did not do a PR job in asking for it.

  • http://twitter.com/b_bankrobber Robert Clary

    A naive, uninformed and pointless article.

  • dngcal

    Creating proxy servers cost very little. A SIP proxy server with 3G apps. to manager 100,000 users can cost as low as 200,000$. Message storage is very cheap too. The problem is creating some infrastructure in each country but truly these costs are comparatively low. The issue is numbers and few telecom operations want markets less than 1 million. It would make far more sense if RIM simply franchised or farmed-out their services to smaller operators within the certain countries.