RIM, Saudis Reportedly Reach Agreement

Aug 9th, 2010 | By businessnews | Category: Business

August 09, 2010, 8:21 PM EDT

By Nicole Gaouette and Hugo Miller

Aug. 10 (Bloomberg) — Saudi Arabia’s government and Research In Motion Ltd. have reportedly reached an agreement on the use of the company’s BlackBerry instant messaging service in the kingdom, a U.S. spokesman said.

“There are reports of an agreement between RIM and Saudi Arabia,” State Department spokesman Philip J. Crowley told reporters in Washington yesterday. He said department officials will meet with company officials later in the day. “We’ll ask if it’s true, for particulars on how it was reached. We’ll see if we can’t be of assistance.”

The Persian Gulf state’s three mobile-phone operators have been testing a system that can monitor user data on BlackBerry devices to avert a scheduled midnight cutoff of the messaging service. Saudi Arabia has said it wants to monitor BlackBerry communications to prevent terrorism and illegal activities.

The Saudi situation is one of a growing number of countries in which Canada’s RIM faces scrutiny over BlackBerry e-mail and messaging. The United Arab Emirates, India and Indonesia have also expressed concern that such mobile communications could be used to violate laws or national mores.

RIM rose 3.5 percent to close at $55.31 in Nasdaq Stock Market trading yesterday. The stock has dropped 18 percent this year.

Saudi Arabia had ordered its operators to turn the BlackBerry instant messaging service off on Aug. 6 and then extended the deadline until midnight yesterday. The service has mostly remained on, users said.

Three Options

Negotiators have been weighing three alternatives for monitoring BlackBerry communications, Al Arabiya television reported yesterday, citing people at wireless operators it didn’t identify.

The first option is that RIM agrees to give the kingdom special servers that make users’ data available to Saudi authorities, the Dubai-based channel said. The second choice is that the Canadian company grants Saudi telecommunications regulators “keys” to log into RIM’s main encrypted servers so that they can monitor data of Saudi phone-company subscribers. The third alternative is that the regulator resorts to third- party companies to decipher BlackBerry messaging data.

Marisa Conway, a spokeswoman for Waterloo, Ontario-based RIM, declined to comment on the State Department remarks. Her colleague Tenille Kennedy earlier declined to comment on the press reports.

Waiting For Instruction

RIM said Aug. 4 it can’t meet requests for the codes to some users’ communications. The BlackBerry corporate service was designed to prevent RIM, or anyone else, from reading encrypted information and any claims that RIM provided “something unique to the government of one country” are unfounded, it said.

Etihad Etisalat Co., one of the Saudi Arabia’s three carriers said it’s waiting for instructions from the country’s regulator on whether to shut off BlackBerry instant messaging.

“The issue is between CITC and RIM,” Abdullah Al Hariri, a spokesman for Etihad’s Mobily service, said in an e-mail yesterday, referring to the Communications and Information Technology Commission. “If CITC says to us stop it we will do that.”

–Editors: Peter Elstrom, Jonathan Annells

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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