India has joined the list of countries putting the squeeze on Research In Motion (Nasdaq: RIMM), citing security concerns as reason to give them access to the encryption technologies protecting corporate email and messaging services on the BlackBerry platform.
The Indian government has reportedly given RIM until Aug. 31 to provide its security agencies access to BlackBerry services or face being cut off.
RIM has reportedly capitulated to similar demands from Saudi Arabia, Russia and China and is facing demands from the United Arab Emirates (UAE) to provide access to BlackBerry services.
Hare Krishna, Hare Security, Hurry BlackBerry
The Indian government has reportedly asked RIM to make encrypted communications over BlackBerries available to its intelligence and law enforcement agencies. New Delhi's argument is that these communications services could be used by militant groups.
Perhaps it has good reason for that request - the 10 gunmen who terrorized Mumbai in 2008, killing 166 people, used cell and satellite phones to communicate with their Pakistan-based leaders, Indian officials claimed. India is also fighting several insurgencies, the best known of which is the one in Kashmir.
Unlike many other smartphones, BlackBerries send and receive encrypted emails through company servers in Canada and other countries, mainly in the West. That worries some governments that want to track the communications of suspected terrorists and insurgents.
"Recently, various governments have become more demanding of wireless service providers and wireless equipment makers, as the services have become both more popular and are increasingly being used by criminals in the act of committing crimes," Allen Nogee, a principal analyst at In-Stat, told TechNewsWorld.
"While the problem was relatively small, most governments seemed to ignore the risk, but as these devices become used everywhere, the governments can't ignore them any longer," Nogee said.
Talk Isn't Cheap
India is apparently the latest in a string of countries seeking to access communications conducted over BlackBerry devices.
The UAE recently threatened to shut down BlackBerry services unless RIM provided its government access to them. Saudi Arabia followed suit, and RIM is now reportedly setting up local servers there.
RIM has given the governments of China and Russia access to communications over BlackBerries by users living in those countries, intelligence consultant Jeffrey Carr wrote in Forbes Magazine's blog.
"If the reports are correct that RIM is setting up servers in Saudi Arabia, you may assume that this isn't the first time it's bowed down to a government," Kevin Burden, vice president and practice director, mobile devices at ABI Research, told TechNewsWorld.
"RIM has been dealing with this type of demands for years," Burden added.
It's Just Business, Ma'am
Why is RIM knuckling under to government requests when, only last year, it issued an app to remove spyware that UAE-owned wireless carrier Etisalat, which also operates in Saudi Arabia, introduced as a BlackBerry "upgrade for service enhancements" -- and denounced Etisalat publicly?
Blame it on increasing competition, which is cutting into RIM's share of the global smartphone market. Gartner (NYSE: IT) reported Thursday that RIM overtook the RIM operating system in the United States, to become the leading smartphone OS in the country.
"A couple of years ago, RIM was the smartphone manufacturer to beat, and there was nothing to really challenge it, so it was in a good position to refuse requests like the one from India," ABI Research's Burden said. "But new smartphones keep coming up and things are different now."
Further, governmental pressure is coming from countries in the very regions on which RIM is banking to ensure its future -- emerging markets.
"In no way can RIM lose momentum in any of these regions," Burden pointed out. "These emerging markets are what RIM's been focusing on in the past five to six year,s and all of a sudden it's facing these roadblocks threatening to shut it down. RIM needs to be a lot more open and flexible now."
Other governments are likely to make similar demands on RIM as it's now facing from India and the Middle East, Burden predicted.
The Null Solution
But how much is RIM really giving away by acceding to these government demands?
"The capability to generate keys is not controlled by RIM but by the client organizations," Rob Enderle, principal analyst at the Enderle Group, told TechNewsWorld. Thus, in Russia, the carrier generated the secure keys that encrypt communications over BlackBerries on its network.
What about the servers RIM is setting up locally in Saudi Arabia and other countries under government pressure?
"The server solution doesn't provide the access these governments want," Enderle explained. "It only prevents the destruction of records after an event, but because the information is encrypted, it can't provide an early warning. All governments can do is watch the level of traffic known criminals or terrorists generate; they can't read the content."
Setting up the servers is a "relatively trivial" matter, Enderle said.
"RIM's system was designed to allow for companies to host their own servers, so allowing carriers or governments to do the same thing shouldn't be too difficult," he added.
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