Saudi Arabia puts pressure on RIM with renewed threat of ban

Saudi Arabia's telecom regulator stepped up the pressure late Saturday on Research In Motion (RIM) by giving three local telecommunications operators up to the end of Monday to ensure that the BlackBerry service meets with its regulations.

The kingdom had on Tuesday ordered a suspension of BlackBerry services from Friday. That deadline has been extended by 48 hours, according to the government-controlled Saudi Press Agency, which cited a statement by the Communications and Information Technology Commission (CITC).

RIM and Saudi Arabia have arrived at a preliminary agreement that will involve the company setting up a server in the kingdom and providing the government access to the data, according to media reports earlier on Saturday from Saudi Arabia.

The extension of the deadline suggests that RIM and the authorities in Saudi Arabia are close to a solution, Matthew Reed, head of research on wireless telecommunications in the Middle East and Africa for Informa Telecoms & Media, said on Sunday.

A CITC official, when contacted, however, declined to comment on Saturday whether the talks were over, or had arrived at a resolution. Satchit Gayakwad, RIM's spokesman in India, said in an e-mail on Sunday that the company did not have any updates to share on the issue.

An agreement between RIM and Saudi Arabia could have implications in other countries, including India, Lebanon, the United Arab Emirates (UAE), and Indonesia, Reed said. These countries are also demanding that RIM locate servers within their national borders, so that their security forces can access the data when required.

If a solution is reached in Saudi Arabia, it will likely have to apply to these other countries, Reed said.

If RIM is seen to compromise with governments on security and privacy, the BlackBerry will lose its attractiveness to customers, Reed said earlier this week. But some customers may just go along with RIM's compromise, viewing it as a necessary adjustment RIM has to make to do business in emerging markets, he said on Sunday.

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