RIM likely to place server in India to skip BlackBerry ban

Written by fe Bureaus | New Delhi | Updated: Jul 30 2010, 05:33am hrs
Research In Motions BlackBerry service may be banned in India unless the Canadian company agrees to resolve security concerns, according to a government official with direct knowledge of the matter. India has told RIM to set up a proxy server in the country to enable security agencies to monitor e-mail traffic, according to three government officials, who declined to be identified as the information is confidential.

The government fears that BlackBerry smartphones, which use advanced 256-bit encryption to scramble messages, may be used by anti-national elements to skip the monitoring and intercepting mechanisms of Indias intelligence agencies. RIM uses overseas servers to route traffic, while the government wants the servers to be located in India.

The government, however, said RIM has assured it of addressing its security concerns soon and hoped that the Canadian service provider and security agencies would be on the same page. BlackBerry has assured the ministry of home affairs that the issue of monitoring BlackBerry services will be sorted out soon...I am sure we will soon be on the same page and our concerns will be addressed, special security (internal security) in the MHA Utthan Kumar Bansal told reporters on the sidelines of a function. RIM spokesman Satchit Gayakwad declined to say if the company had been contacted by the department of telecommunications.

RIM faces increased competition in India from smartphones, including Apples iPhone as the worlds second-biggest mobile-phone market prepares to roll out third-generation wireless services.

RIM has the best encryption, significant subscribers, and a brand thats known across the world, said Anshul Gupta, principal research analyst at Gartner. This isnt the first time a government has had the fear that terrorists could use BlackBerry services for international communication. Resolving the concerns is crucial for Research In Motion to maintain its market leadership in India, Gupta said. RIM does not disclose confidential regulatory discussions that take place with any government, Gayakwad said. However, RIM assures its customers that it is committed to continue delivering highly secure and innovative products that satisfy the needs of both consumers and governments.

The ministry of home affairs and the department of telecommunications met in New Delhi about ten days ago and had asked the mobile-phone maker to comply with the demands, one of the officials said. The authorities intend to resolve the issue by the middle of next month, the official added. RIMs tussle with the government dates back to 2008, when negotiations with the department of telecommunications ended with the company agreeing to allow monitoring of e-mail on its handsets.

The BlackBerry maker had some services blocked in neighboring Pakistan this year, and the United Arab Emirates is considering tightening security. The company had recently faced obstacles in Pakistan, where the national telecommunications regulator said it blocked Internet browsers on BlackBerry handsets, citing blasphemy concerns.