RIM may have cut deal with Saudi Arabia, say reports

Saudi Arabia did not go ahead with threat to cut BlackBerry services on Friday

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

An agreement by RIM with Saudi Arabia could set a precedent for similar deals with other countries, including India, Lebanon, the United Arab Emirates (UAE), and Indonesia, which are demanding that RIM locate servers in their country, and provide access to data to their security forces, analysts said.

Saudi Arabia's telecom regulator, the Communications and Information Technology Commission (CITC), and local phone operators have reached a preliminary agreement with RIM over the handling of BlackBerry data that will involve setting up a server in the country, The Wall Street Journal reported, citing a person familiar with the talks.

A CITC official however declined to comment on whether the talks were over, or had arrived at a resolution. RIM also did not respond to e-mail requests for comments.

Saudi Arabia had said that it would suspend BlackBerry services from Friday, but the service was largely uninterrupted, except for a four-hour break by one operator, according to reports. The UAE has also announced a suspension of BlackBerry services from October 11, as it objects to BlackBerry data from the country being sent offshore, where it is managed by a foreign, commercial organization.

RIM is also negotiating with Indian officials who are demanding access to data on the BlackBerry network for its security agencies.

Imad Hoballah, acting chairman and CEO of Lebanon’s Telecommunications Regulatory Authority, said on Friday that his agency is initiating talks with RIM next week, to ensure that security agencies in the country can monitor RIM’s network, as part of a move to strengthen telecommunications network security in the country afte after the country recently charged three people of spying for Israel.

While ruling out a suspension of BlackBerry services, Indonesia wants RIM to have a server in the country. Heru Sutadi, commissioner of Badan Regulasi Telekomunikasi Indonesia (BRTI), the country’s regulator, said that BlackBerry traffic from the country now goes to Canada, and Indonesia cannot guarantee to local customers the security of the data that RIM processes, keeps, and saves in Canada.

In a customer update earlier this week circulated to the media, RIM said that it does not possess a "master key," nor does any "back door" exist in the system that would allow RIM or any third party to gain unauthorized access to the encryption key or corporate data. The symmetric key system used in the BlackBerry security architecture for enterprise customers ensures that only the customer possesses a copy of the encryption key.

RIM is in a tight spot because if it is seen to compromise with governments on security and privacy, the BlackBerry will lose its attractiveness to customers, Matthew Reed, who heads research on wireless telecommunications in the Middle East and Africa for Informa Telecoms & Media, said earlier this week.

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