Don't shoot the messenger

BlackBerry/UAE: The BlackBerry ban looks like a ballsy tactical move by the Gulf. The smartphone made by Canada's Research In Motion is the first choice for the global banking community. So the UAE's decision to ban Messenger, email and Web browser services from October, and a reported partial ban in Saudi Arabia, is a big negative for business. RIM, its users and the Gulf have plenty to lose in the stand-off.

The repercussions could be far-reaching. The UAE and Saudi Arabia have just 1.2 million BlackBerry users, according to Reuters, less than three per cent of all BlackBerry subscribers. Yet finance professionals travel extensively. While the exact detail of the ban remains unclear, the actual number of users affected could be much higher if the clampdown also applies to foreign issued BlackBerries.

The two-month notice period given by the UAE, which overlaps the Muslim holy month of Ramadan when working hours are significantly shortened, is inadequate time for institutions to securely migrate users to alternatives devices. The interruption would be an unwelcome obstacle to recovery for debt-laden Dubai, an emirate within the UAE, and for those international banks that have invested in the region and want to see an upturn.

But RIM, the only smartphone maker in the Gulf that exports its data off-shore without entering local infrastructure, is also in a weak position. The iPhone is gaining ground on the BlackBerry in the enterprise market. Standard Chartered is adopting Apple’s smartphone as standard globally, and has already implemented the move in Asia. Other institutions are considering similar actions. Banks say they are more worried about keeping data secure from commercial rivals than they are about state censorship, and in this area, Apple is catching up fast.

The UAE telecoms regulator says the ban is the result of the failure of attempts since 2007 to bring RIM into line with its domestic rules. But it looks like a negotiating tactic. India recently raised similar concerns with the BlackBerry over national security but government officials say RIM is now working to address the issue. Given how high the stakes are for both sides, expect the UAE and RIM to make a similar attempt at a compromise.