Governments resist BlackBerry’s spread

Research In Motion Ltd., maker of the BlackBerry smartphone, faces challenges to 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.”

RIM, based in Waterloo, Ontario, is focusing on countries including India, the U.A.E., Indonesia and Brazil as a decade of North American expansion slows. Revenue from outside North America and the U.K. nearly doubled last quarter as U.S. sales, which account for a quarter of revenue, dropped 7 percent. 

For RIM, the pioneer in handheld e-mail devices, security is one of the main advantages it touts over competitors. All BlackBerry e-mails are handled by the company’s own enterprise servers, making the devices popular with companies and government officials including Barack Obama, who kept his BlackBerry after becoming U.S. president. 

Security concern 

Bianca Limwatana, a spokeswoman for RIM based in the U.A.E., said the company did not have any immediate comment and is working on a statement. Tenille Kennedy and Marisa Conway, spokeswomen for RIM in Canada and the U.S., didn’t return messages seeking comment. 

Encryption is an issue for some countries looking to beef up rules on information sharing in cyberspace amid concern BlackBerry devices could be used to coordinate a terrorist attack or try to bring down a government. 

In the U.A.E., 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. 

“Security concerns trumped commercial considerations,” Eckart Woertz, who manages the economics program at the Dubai- based Gulf Research Center, said of the U.A.E. decision. “They want to control ongoing telecommunications but can’t because of the way BlackBerry manages its data offshore.” 

‘Indispensable tool’ 

The decision means a “few hundred thousand” BlackBerry users in the U.A.E.’s 30 billion-dirham ($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.”