Research In Motion (RIM), the Canadian maker of the BlackBerry, was granted a reprieve by Indian authorities after it said it would "immediately" provide the country's law enforcement agencies with "certain proposals" that would provide them with the ability to monitor messages sent by the smartphones.
The company now has an additional two months to work with the country's telecommunications operators to ensure mobile networks are able to be tapped by Indian officials. The Indian government will then review the situation and determine whether BlackBerry services will continue to operate in the country. "RIM have made certain proposals for lawful access by law enforcement agencies and these would be operationalised immediately," the Indian home ministry said. "The feasibility of the solutions offered would be assessed thereafter."
The government did not disclose what proposals RIM would provide. Shares of RIM rose more than 1 per cent in early-morning trading on the Toronto Stock Exchange. RIM shares did not trade on the NASDAQ exchange because it was closed for a US holiday. India and other countries including Saudi Arabia and the UAE have demanded access to the encrypted message services provided by BlackBerry to guard against possible abuse by criminals and terrorists.
The UAE will suspend BlackBerry services from October 11 if an agreement on access to the encrypted service is not reached. Saudi authorities are understood to be testing BlackBerry servers installed by RIM in the kingdom. RIM had until today to comply with India's demands that it provide access to decoded BlackBerry transmission or face a freeze of the device's messaging services. The decision is likely to cause many executives in corporate India to breathe a sigh of relief. The BlackBerry is considered a status symbol among young professionals and top executives and a ban on the device's services would probably put a temporary strain on the economy, analysts said.
"The enterprise community as a whole is concerned right now because a lot of the business that they're doing is through BlackBerry," said Kamlesh Bhatia, the principal research analyst for Gartner, a technology research firm. "Now a lot of them are concerned that they don't have a 'plan B' if a BlackBerry ban actually happens." The BlackBerry is also a big revenue generator for the Indian telecoms market, making up almost all of the 4.53 billion rupees (Dh354.9 million) share of the country's mobile enterprise market, said Nanditha Krishna, the technology programme manager for the market analyst Frost & Sullivan.
Nine telecoms companies offer BlackBerry services in India, including leading private players such as Bharti Airtel and Vodafone as well as government-controlled enterprises such as BSNL and MTNL. "I get calls non-stop from our customers inquiring [about BlackBerry]," said a spokesman for Bharti Airtel, India's largest mobile service provider. "Everyone in the cellular ecosystem is eagerly waiting and watching the government's next move.
"We will consider those options once the government announces its decision." Rajesh Chharia, the president of the Internet Service Provider Association of India, a privately managed association of Indian telecoms companies, said RIM should respect the country's laws and give the Indian government "whatever it wants". "We explained to [the Department of Telecommunications officials] that encryption and decryption of messages is the propriety of RIM," Mr Chharia said. "Service providers cannot help with that. Only RIM can."
Still, the threatened BlackBerry ban in India has already put a damper on the device's sales, mirroring a similar phenomenon that occurred in Abu Dhabi when the UAE announced it would freeze its services. Sales at Cellcom, a private mobile phone store in the city of Pune in western India, have fallen by about a quarter since the ban was announced last month. "Owning a blackberry is a status symbol here," said Vishal, the Cellcom store manager, who declined to give his second name.
"But, obviously, people will think twice before shelling out a good 30,000 rupees for a product that might get banned." India is the world's fastest-growing wireless telecoms market after China. At the end of May, India had 618 million mobile phone connections, and the subscriber base is expected to climb to 993 million by 2014, according to the Mumbai branch of Gartner, a global research firm.