In numbers

4 per cent: Drop in Research in Motion shares since announcements were made

500,000: Estimated Blackberry handset users in UAE

Source: MEED/IDC/Rim

Businesses in the Gulf are facing the prospect of widespread disruption to their mobile phone services after Riyadh and Abu Dhabi announced plans to suspend services provided by the Blackberry mobile phone.

The UAE’s Telecommunications Regulatory Authority (TRA) said on 1 August that the Blackberry Messenger (BBM), Blackberry Email and Blackberry Web-browsing services in the UAE will be suspended as of 11 October in response to security concerns.

Riyadh announced later on the same day that it is suspending Blackberry to Blackberry instant messaging services.

The Blackberry mobile phone is the most widely used smart phone in the region and the move is likely to affect hundreds of thousands of users across the region, particularly business users. It will also dent the financial performance at regional telecoms operators.

In a recent survey by MEED, about 80.8 per cent of subscribers polled said they used the Blackberry handset and its associated services to carry out their day-to-day work activities. About 9.1 per cent said they used the iPhone, while just over 6.1 per cent use Nokia phones.

The UAE’s TRA said that the suspension is due to the ‘the failure of ongoing attempts, dating back to 2007, to bring Blackberry services in the UAE in line with UAE telecommunications regulations’.

 “With no solution available and in the public interest, in order to affect resolution of this issue, as of October 11, 2010, Blackberry Messenger, Blackberry Email and Blackberry Web-browsing services will be suspended until an acceptable solution can be developed and applied,” said TRA director general Mohamed al-Ghanim.

“We informed both Etisalat and Du [Emirates Integrated Telecommunications] that providing the option of alternative services to ensure the continuity of service from 11 October to its subscribers – both individuals and organisations – is the most important priority,” he added.

The reason behind the TRA’s decision is that Blackberry data is immediately exported off-shore and managed by a foreign, commercial company and is therefore outside of the UAE’s control.

“Today’s decision is based on the fact that, in their current form, certain Blackberry services allow users to act without any legal accountability, causing judicial, social and national security concerns for the UAE,” the statement concluded.  

Saudi Arabia’s telecoms regulator, the Communications and Information Technology Commission (CITC), has sent a memo banning Blackberry messenger.

Faten Bader, a senior telecoms research analyst with Jordan-based Arab Advisors Group, said that the move is likely to hit profits at the UAE’s major telecoms companies, Etisalat and Du, due to the large number of Blackberry users in the Gulf state.

“I think banning this kind of services will affect Etisalat and Du’s revenues significantly,” Bader says. “It is good news for Blackberry’s competitors like the iPhone and Nokia as they will be able to offer alternative services to customers.”

US research company IDC has claimed that around 187,000 Blackberry handsets, made by Canada’s Research in Motion (Rim), were sold in the UAE in 2009 and that around 500,000 people use the technology.

In 2009 Etisalat made around $2.4bn in net profits while du made $143.76m. Neither company has declared how large a proportion of their profits came from providing Blackberry services.

The UAE has been voicing concerns about the Blackberry handset since 2007. In 2009 Etisalat attempted to secretly install spyware on Blackberry handsets in an attempt to monitor use.