BlackBerry faces new government crackdowns on phone use

The use of BlackBerrys will be banned throughout the United Arab Emirates, raising the stakes in the country's confrontation with the smartphone's maker, Research in Motion (RIM), for the second time in 24 hours.

The UAE, which counts the regional business centre Dubai among its seven emirates, had already announced a ban on BlackBerry email, web browsing and messaging services – which will start on 11 October – unless RIM agrees compromises to allow the government access to customer details.

The country's telecoms regulator said yesterday it will also block such traffic from foreign devices roaming on the UAE's two local networks.

RIM shares fell more than 2 per cent in early trading yesterday, even as the rest of the stock market was sharply higher, as analysts considered the position in which the company now finds itself.

The company's popularity in the West has been built on the security of technology, but that very security is bringing it increasingly into conflict with governments in emerging markets, where it has been chasing growth opportunities for the future.

The row threatens to overshadow the launch today of what is believed to be a new operating system for the next generation of BlackBerrys, including a new touchscreen device designed to take on Apple's iPhone.

Data travelling to and from BlackBerrys is encrypted directly on the phone and routed via secure servers in Canada. The UAE and other governments have argued that this puts BlackBerry users uniquely beyond the scope of their national security laws and would prevent the authorities from having access to information to monitor security threats and investigate crime. Saudi Arabia is preparing a ban on BlackBerry's messenger service and India, too, had threatened a ban, although it now says it is in talks with RIM about a possible compromise.

In the Middle East, the device has surged in popularity precisely because of the opportunity it provides to circumvent government restrictions and conservative morals, according to Matthew Reed, a mobile analyst for the market research firm Informa based in Dubai. "The BlackBerry is very popular partly for the same reasons it is popular elsewhere, namely, business like email on the go and the security of BlackBerry messenger. But what is different in this region is some of the other uses for it.

"In Saudi Arabia, for example, where there are rigid limits on association between the sexes, people are using BlackBerry messenger for dating and socialising in ways that were difficult before. Also, there have been some people using it for political association and activism."

Any compromises in the Middle East or elsewhere could rebound on RIM, warned Tim Renowden, a telecoms policy and regulation analyst at the consulting firm Ovum.

"The difficulty is that security has been a key selling point for BlackBerry and acquiescing to government demands would significantly undermine its security credentials, particularly with business and public sector customers. There are legitimate reasons for wanting data encryption and privacy – and there is a concern that if RIM compromises with one government then others will demand the same access," he said.

"This is part of a wider debate around government monitoring and filtering of telecommunications and the internet, with deep implications for privacy, freedom of speech and national security.

"The loss of access to the UAE market will upset BlackBerry customers and international business travellers in the region, but RIM looks likely maintain its current stance and avoid damage to its reputation in the much larger North American and Western European markets."

Reflecting the sensitivity of the situation, RIM has been slow to reveal its hand and issued a boilerplate statement yesterday assuring customers it remained committed to their privacy.

"The company respects both the regulatory requirements of government and the security and privacy needs of corporations and consumers. RIM does not disclose confidential regulatory discussions that take place with any government, however, RIM assures its customers that it is committed to continue delivering highly secure and innovative products that satisfy the needs of both customers and governments."

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