RIM wins reprieve on India shutdown

RIM makes last minute concessions to avoid imminent India power-off, but problems in the Gulf still rumble on.
RIM wins reprieve on India shutdown
India is pushing RIM to set up local servers to allow full monitoring of its services.
By Bappa Majumdar and Devidutta Tripathy
Sun 05 Sep 2010 04:00 AM

RIM makes last minute concessions to avoid imminent India power-off, but problems in the Gulf still rumble on. Can BlackBerry endure, or is it just too private? By Bappa Majumdar and Devidutta Tripathy.

Research In Motion will give India access to secure BlackBerry data beginning September 1, a government source has said, leading New Delhi to put off a decision on whether to shut down the smartphone.

Concerned about militants using the BlackBerry or internet to plan attacks, India is also pushing RIM, Google and Skype to set up local servers to allow full monitoring of their services.

Shares of Canadian-based RIM rose after the Indian Interior Ministry said the company had offered several ways to allow authorities to monitor BlackBerry communications. The government said it would check their feasibility over the next 60 days.

New Delhi had threatened to shut down BlackBerry email services unless RIM provided a workable way for the government to monitor the data. India has said it wants the means to fully track and read BlackBerry communications.

Indian officials have also expressed concerns over security threats from internet-based messaging and other services from providers such as Google and Skype.

The Indian government had initially set a August 31 deadline for RIM to come up with a method to allow email monitoring and avoid a shutdown in the world’s fastest-growing mobile phone market. Last week, a source said RIM had provided an interim solution.

“They have given some access, which we will operationalise from September 1,” said the government source, referring to RIM.

“They will have to provide full access to all communications that go through India. They will have to set up a server in India,” the source said on condition of anonymity as he was not authorised to speak to the media.

A RIM spokesman based in India said the company had no immediate comment, while a spokeswoman at Google said the company was unable to comment as it had had no communication from the government.

Skype said it had also not received any directive from authorities in India.

BlackBerry’s reputation is built on its system security and a compromise under pressure from governments could damage the device’s popularity with business professionals and politicians.

Apple Inc and Nokia, RIM’s two biggest smartphone rivals, may have the most to gain if India issues a ban on BlackBerry services. Nokia has said it plans to host an email server in India from November 5.

India is keen to retain its position as one of the world’s fastest-growing information-technology nations, and a BlackBerry ban would jeopardise its status. A shutdown would also limit the efficiency and productivity of Indian businesses that rely on the smartphone.

“It is a huge hassle, and not only for the government itself, which uses the RIM service,” said Avian Securities analyst Matthew Thornton.

“It’s not easy to take out all of your servers, put in new servers, take out all the different devices you have in the field, and then put in new devices. It’s a big hassle and a cost,” he said.

RIM uses powerful codes to encrypt email messages as they travel between a BlackBerry and a computer known as a BlackBerry Enterprise Server (BES) that is designed to secure those emails.
RIM has said BlackBerry security is based on a system where the customers create their own key and the company neither has a master key nor any “back door” to allow RIM or any third party to gain access to crucial corporate data. In addition to India, several other countries, most of them in the Middle East, have raised concerns that the BlackBerry could be used to aid terrorism or peddle pornography.

Disputes between Gulf Arab states and the maker of the BlackBerry smartphone over access to encrypted communications highlight a growing nervousness over looming regional security threats, from Iran to Al Qaeda.

The Messenger application on the BlackBerry has spread rapidly in the Gulf Arab region where it is a popular business and social networking tool. But because the data is encrypted and sent to offshore servers, it cannot be tracked locally.

That has raised fears in security-conscious Gulf states, especially in the United Arab Emirates and Saudi Arabia, that a lack of access could fetter their ability to ferret out potential spies, assassins or Islamic militants, analysts said.

“They feel like they are under threat,” said Shadi Hamid, research director at the Brookings Doha Centre, citing growing concerns, especially in the UAE, of being drawn into a potential conflict with Iran.

“The UAE is very much on the front line.”

Saudi Arabia and the UAE, the most hawkish Gulf Arab states vis-a-vis Iran, are concerned BlackBerry messaging could be used to harm social and national security interests, although they have not made their specific fears public.

A potential conflict with Iran is currently seen as the Gulf’s biggest security risk.

As security tensions escalate in the Gulf region, both countries threatened bans on BlackBerry services although Riyadh appears to have resolved its dispute this month with RIM.

The Arab states in the Gulf share the suspicions of their Western allies that nearby Iran is seeking a nuclear weapons capability. Neither Washington nor Israel have ruled out military action if diplomacy and sanctions fail.

That spells danger for the oil-exporting Arab states, home to a myriad of Western military installations, who would almost certainly be drawn into the fray of any military conflict and fear potential repercussions as tensions escalate.

“We are in the fourth round of sanctions against Iran, and there is a lot of chatter about what is going to happen with Iran regarding its nuclear programme,” said Theodore Karasik of Dubai’s Institute for Near East and Gulf Military Analysis.

“These countries are looking to safeguard themselves against any potential fifth column, so they need to be able to monitor everything in order to figure out if there is a real threat,” Karasik added.

The UAE has a large Iranian population in Dubai and strong trade links to Tehran. Sunni-dominated Saudi Arabia, the biggest Arab economy, is concerned about Iranian sway among minority Shi’ites in the east, especially as regional tensions escalate.

In Saudi Arabia, RIM has been able to avert a Messenger ban by agreeing to hand over coveted “codes” to users’ phones, an industry source familiar with the talks has said.

But a potential ban still looms in the UAE after the government threatened to suspend BlackBerry Messenger, email and web browser services from October 11 citing security reasons.
The UAE, which sees the issue as a matter of sovereignty, objects to BlackBerry data being exported offshore.

A UAE diplomat has said talks with RIM were progressing well.

Accusations, denied by Iran, that Tehran was running a spy ring in Kuwait have added to the perceived urgency of the issue on Gulf Arab fears that Tehran may be scouting out targets for retaliation in the event of a strike on its nuclear facilities.

The security fears of Gulf Arab countries, however, extend far beyond Iran to the potential for attacks from a resurgent regional wing of Al Qaeda to fears about Israeli spying, domestic dissent or perceived immoral behaviour.

BlackBerry has proven popular with young singles in Saudi Arabia, the biggest BlackBerry market in the Gulf with 700,000 users, as a means of meeting in an Islamic society which restricts contact between unrelated men and women.

Activists in the Gulf region have also said its encrypted texting has helped foster freer dialogue, including criticism of governments and policies.

The ability to keep an eye on communications of domestic political opponents would be a side benefit for governments of any RIM concessions on access, analysts say.

Saudi Arabia is deeply concerned about the threat of militancy from a Yemen-based Al Qaeda arm that last year tried to assassinate a Saudi prince who ran the kingdom’s anti-terror campaign, and which has stepped up activities in recent months.

Tight communications monitoring are thought to have helped Saudi Arabia quash a 2003-2006 Al Qaeda campaign to topple the monarchy. In light of recent security threats that have been foiled, Riyadh is keen not to lose the upper hand.

Analysts say Gulf officials were conscious of suspicions by Indian security agencies that militants used BlackBerry services to plan a 2008 Mumbai attack in which 166 people died.

“Keep in mind that Al Qaeda is sophisticated too, and they are into technology, and they have their own experts here,” said Saudi political writer Khalid Al Dakhil.

“I would think that terrorists, Al Qaeda, foreign intelligence agencies whether Iranian or otherwise. I think these are the most immediate concerns,” he added.

In the UAE, a regional business hub with fairly open borders and an estimated half a million BlackBerry users, concern about foreign agents was heightened after the assassination of Hamas leader Mahmoud Al Mabhouh in a Dubai hotel in January in what was widely seen as an Israeli secret service hit.

“Definitely the question of Mabhouh or the question of the Iranian spying cell in Kuwait is a wake-up call,” said Mustafa Alani of the Gulf Research Centre, adding the outcome in the UAE and Saudi would serve as a test case for smaller Gulf states.

“I am sure the Bahrainis and the Qataris and the Omanis have similar worries... We are in a very tough neighbourhood.”

Canada’s RIM has come under scrutiny from other countries as well, including India, Lebanon and Algeria.

Kuwait has said it was in talks with RIM over moral and security concerns but had no intention of stopping BlackBerry services for the time being.

Oman also says it has no plans to block BlackBerry services.

Bappa Majumdar and Devidutta Tripathy are news columnists for Bloomberg.

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