/ 3 August 2010

Gulf states put the squeeze on BlackBerry

There were concerns on Monday night that other governments could suspend BlackBerry data services including email and web browsing after the United Arab Emirates and Saudi Arabia announced plans for bans over the weekend, citing security issues.

The move to suspend data services on the popular devices is the latest flare-up as governments in the Middle East and other countries including China, Turkey and Pakistan grapple with the free flow of information over the internet.

The UAE, which includes the business centres of Dubai and Abu Dhabi, said on Sunday it would prevent BlackBerry services such as email, web browsing and text messaging from October, after first raising concerns with the Canadian manufacturer Research In Motion three years ago.

The ban will extend to visitors to the UAE who take their BlackBerrys with them, although phone services will still be available. Saudi officials told local television the region’s most populous nation would follow by blocking instant messaging on the BlackBerry from October.

Shares in RIM, which are quoted on the Nasdaq exchange, were on Monday night trading 2,4% lower at $56,12, overshadowing the launch on Tuesday of its long-awaited answer to Apple’s iPhone as it attempts to recapture some initiative in the smartphone market.

The Gulf states have singled out BlackBerry, which has 46-million users worldwide, because unlike rivals, it encrypts its data and processes it through a handful of secure operational centres, chiefly in Canada, putting them outside of local jurisdictions. That makes it a more secure network and popular for corporate and government users, but more difficult to monitor. India, Kuwait and China have also raised concerns.

Neil Mawston at Strategy Analytics said a high-profile case could cause other governments to look again. “If there is sustained public attention drawn to this practice over several months and if international growth starts to slow as a result, RIM may have to review its policy of routing data via Canada servers,” he said.

“Any country in the world could potentially raise concerns if they think it will affect their security. Countries that already have relatively tight PC internet controls are likely to turn their focus increasingly to wireless data services as they become more popular.”

Social networking, news
Matthew Reed at Informa, a mobile analyst based in Dubai, said one of the main reasons for the clampdown on BlackBerry devices in the Gulf is their ubiquity. “BlackBerrys are very, very popular here, far more than the iPhone for example,” Reed said. “And they are not just being used for email. People are using BlackBerry Messenger and one of the reasons they have become a concern for the authorities is more and more people are using them for social networking and even news.”

The administration in Bahrain recently banned the provision of local news on BlackBerry devices. Anyone accessing social networks on a BlackBerry, meanwhile, risks contravening strict religious conventions — and even laws in some states — that govern personal behaviour.

“In Saudi Arabia, people are using BlackBerry Messenger to talk to members of the opposite sex,” said Reed. “It is the fact that it is a form of communication which is quite anonymous that is part of its appeal to people.”

In a statement issued on Sunday, the UAE’s telecoms authority said: “BlackBerry data is immediately exported offshore, where it’s managed by a foreign, commercial organisation.”

It said the decision to ban data services “is based on the fact that, in their current form, certain BlackBerry services allow users to act without any legal accountability, causing judicial, social and national security concerns”.

RIM has become increasingly popular. In the first quarter it overtook Sony Ericsson as the fifth largest mobile handset firm in the world with a share of about 3,6%, according to the research firm IDC.

Nick Jones, analyst at Gartner, said the impact of the ban on RIM would be minimal — he estimates sales in the Middle East and Africa are less than 1% of the firm’s global volumes — and that it was more important the company stood firm. “It is more important for RIM to have a secure network than it is to buckle under government pressure,” he said. “People trust BlackBerry. It is the most secure mobile consumer device you can buy. If it gave in, the impact on sales would be small and the impact on reputation would be large.”

There are about 400 000 BlackBerry users in Saudi Arabia and 500 000 more across the UAE.

Increasingly, technology companies are being forced to tread a difficult line between building their businesses in emerging markets and not being seen to enforce what might be a repressive regime.

Other US internet firms have fallen foul of governments. Google had a high-profile stand-off with Beijing about the censorship of information on its service in China but reached a compromise last month that allows Chinese users to be redirected to a Hong Kong home page.

Turkey and Pakistan have both temporarily blocked access to YouTube, while Pakistan prevented its population from using Facebook in May because of what it described as anti-Islamic content on the social-networking site.

In a statement, RIM said it “respects both the regulatory requirements of government and the security and privacy needs of corporations and consumers”.

How BlackBerry developed its phone and networks
When the first BlackBerry appeared, over a decade ago, cellphone networks were far more basic than they are today. The most innovative service the majority of users had seen since mobile devices first appeared in the 1980s was the introduction of text messaging.

In the US, many cellphone users were still making calls on analogue networks, while in Europe the new digital operators were only just introducing data services. But the sorts of speeds possible over networks such as Orange and Cellnet in the UK were pitiful. Speeds of 9,6Kb per second — less than 1% of the average speed available in the UK today, according to recent research — meant the networks had to resort to offering a pared-down version of the internet using Wap (Wireless application protocol) technology. Using a mobile phone to receive email, let alone access the “real” internet was almost unheard of.

By the mid-1990s, Research In Motion was already working with partners on a messaging device that would work on a new wireless data network, which its owners hoped would be rolled out across Europe and the US. It was not much of a success — although the UK network that used this technology eventually became Turbo Dispatch, which now sends mechanics from local garages to help millions of stranded motorists every year.

As a result, RIM switched to working with the existing cellphone companies, but to squeeze emails across their networks meant using compression technology. RIM also needed to be able to persuade jittery corporate IT departments their emails would be safe, which required encryption technology. To create such a lean and secure service, required an end-to-end solution, with both the device, the BlackBerry, and the server hosting the user’s email being able to understand each other. However, RIM wanted to be able to offer its devices on any cellphone network.

As a result, it created the Network Operations Center (Noc), which seems to have created such a headache in the Gulf. Every cellphone operator that wants to offer BlackBerry devices has to have a connection to a Noc: — there is apparently one based in Canada to cover the Americas and one covering Europe and Asia. A company that wants to offer BlackBerrys to its employees, meanwhile, has to install software within its own IT systems that can communicate with the Noc.

When a user’s inbox receives a new email, that software securely communicates with the Noc, which then connects securely to the BlackBerry over a cellphone network to deliver the email. It uses compression technology to make sure the email can be squeezed over even the most congested network. Numerous research reports over the past year have suggested that BlackBerrys are at least five times more efficient at email and attachment viewing than any other platform.

RIM has since opened its network up to consumer email services such as Gmail and Hotmail, which together with the introduction of a range of stylish devices aimed at the consumer market has created a boom in usage of BlackBerry phones among teenagers. Opening up the RIM network to the web has also allowed internet browsing, which is also apparently faster on a BlackBerry than other devices. They are three times more efficient than other carriers, according to a recent report by Rysavy Research.

But there is another side-effect to the way that RIM’s network architecture is configured and it has been seized upon by cash-strapped teenagers: BlackBerry Messenger. Because RIM knows every BlackBerry device in use, regardless of which network it is on, and they are all directly connected to its Nocs, BlackBerry users who have devices with the right software can communicate with each other without incurring the network interconnection and roaming charges associated with SMSes.

SMSes and telephone calls, meanwhile, are routed solely over a cellphone network, so neither will be affected by the UAE’s decision. That also explains why when there is a problem with RIM’s network — which has happened in the past — BlackBerry users can still send emails and make calls.

The first BlackBerry appeared in the late 1990s and was effectively a two-way pager. The first full email device — the 5810 — appeared in 2002.

The name, incidentally, was created by the company’s brand agency, which looked at the trademark small buttons on the device’s keyboard and decided they looked like the pips on a strawberry. That name, however, sounded too “slow”. Blackberry sounded punchier and it stuck. – guardian.co.uk