The prospect of weaker growth for BlackBerry sales in emerging markets has knocked US$2.3 billion (Dh8.44bn) off the value of Research In Motion (RIM) shares since the Government's decision to suspend the service from October. The share slide has rattled executives of RIM, the Canadian company that makes BlackBerry smartphones. The company's co-chief executive broke days of silence with a defence of RIM's strong encryption codes.
In an interview with The Wall Street Journal published yesterday, Michael Lazaridis said the BlackBerry was being unfairly singled out by governments trying to score political points. The company is in talks with regulators in a number of countries in an effort to convince them of the need for secure communications. "This is about the internet," Mr Lazaridis said. "Everything on the internet is encrypted. This is not a BlackBerry-only issue."
Badii Kechiche, a senior telecommunications analyst at Pyramid Research, said RIM's growth forecasts could be jeopardised if opposition to BlackBerry products snowballed, since RIM had been concentrating on sales in emerging markets to counter a slowdown of sales to business users in the West. "All of a sudden you've a problem in a market of at least 300 million to potentially more than 1 billion and that's definitely a difficult position to be in," Mr Kechiche said.
The UAE has been joined by Saudi Arabia, which will cut services from tomorrow, surprising telecoms operators that had initially expected a three-month grace period to prepare for the changes. The Saudi government will also fine wireless carriers up to $1.3 million if they fail to toe the line on suspending BlackBerry services, according to reports in the Qatari newspaper The Peninsula. RIM executives reportedly held emergency talks with officials in Riyadh last night.
Separately, the Lebanese government said it would start talks with RIM, citing security concerns with BlackBerry software. "We are studying the issue from all sides - technical, service-wise, economic, financial, legal and security-wise," said Imad Hoballah, the acting head of the country's regulator. "We are discussing this with the concerned administrations and ministries," he told Reuters. The Kuwait Society for Human Rights warned in a press release that the Kuwaiti government was considering halting, or at least restricting, BlackBerry services in Kuwait, the online Arabic-language news service Alaan reported yesterday.
The Indonesian government has denied reports this week that it was also considering a ban on the BlackBerry, according to Agence France-Presse. The report added that the government had asked RIM to open a data centre in Jakarta to avoid routing information through Canada. India has said it expects to obtain an agreement with RIM to obtain access to encrypted messages. Mr Lazaridis called for calm. "This will get resolved. And it will get resolved if there is a chance for rational discussion."
The US government waded into the controversy yesterday as Hillary Clinton, the secretary of state, said there would be talks with the UAE over the matter. The State Department had previously said it was "disappointed" by the UAE's decision. "We are taking time to consult and analyse the full range of interests and issues at stake because we know that there is a legitimate security concern, but there is also a legitimate right of free use and access," Mrs Clinton said.
"So I think we will be pursuing both technical and expert discussions as we go forward," she said. gregor.hunter@thenational.ae