MUMBAI, Aug 27 (Reuters) - Research in Motion RIM.TO faces an Aug. 31 deadline to give India access to its secure email and instant messaging services or the Indian government has said it will ban those services, hurting much of corporate India.
India toughened its stance on RIM on Friday, saying any solution must pass through field trials. The government says it is concerned that militants could misuse the services to create instability. [ID:nSGE67Q08R]
If India does ban BlackBerry services, it would be the first country to do so, even though several governments have raised security concerns about the popular device.
Following are scenarios on what might happen to the services:
Probability: Most likely
RIM could secure an extension of the deadline by persuading the Indian government to hold more talks with the company and jointly arrive at a solution to address security concerns.
RIM on Thursday offered to lead an industry forum to look at India's need to have "lawful access" to its encrypted mail and messenger in an effort to stave off the blocking of the popular service in the world's fastest growing telecoms market.
"Discussions are ongoing. We are not in the business of shutting down services," junior telecoms minister Sachin Pilot said on Friday.
Earlier this month, RIM successfully managed to get a reprieve from a ban threatened by Saudi Arabia, with the country saying progress was being made on addressing its concerns.
Kuwait does not plan to ban BlackBerry services, but has been holding talks with the manufacturer about moral and security concerns. RIM had been asked to block pornographic sites and the company has requested four months to deal with the request.
RIM has hit back at India by pointing out that blocking BlackBerry services would be futile and has warned Indian firms' productivity and efficiency could be a hit by such action.
The security that BlackBerry offers has made it popular with companies looking for a secure way to communicate, and the device has become an integral -- and possibly indispensable -- part of business executives' lives.
India, an emerging market and the world's second-fastest growing major economy, may not risk stoking the ire of businesses over a service that has become critical to the functioning of corporations in the country and around the world.
A shutdown would affect about 1 million users in India out of a total 41 million BlackBerry users worldwide, allowing them to use the devices only for calls and Internet browsing.
Unlike rivals Nokia NOK1V.HE and iPhone-maker Apple (AAPL.O), RIM uses powerful codes to encrypt, email messages.
RIM has said BlackBerry security is based on a system where customers create their own key and the company neither has a master key nor any "back door" to allow it or any third party to gain access to user data.
The security offered by RIM is both a blessing and a curse for the firm. While it sets RIM apart from rivals, it is a headache for governments intent on monitoring chatter between militants who may be plotting to cause instability.
India faces an internal security threat from a rising Maoist insurgency, as well as the risk of militant attacks similar to the one in 2008 when armed Pakistan-based militants went on a rampage across several Mumbai landmarks, killing 166 people.
Analysts see no easy fix to the standoff as RIM says it has no way of intercepting the data that countries want access to. RIM has denied media reports that say it provided unique wireless services or access to any one country. [ID:nWEN8334]
The company is likely betting that countries that ban the service risk being viewed as anti-business while also boosting RIM's reputation for providing unparalleled security that even governments cannot crack, experts say.
Government code crackers could possibly break the encryption on their own without RIM's help, but it is a slow process that requires tremendous skill and powerful computers.
Also, cracking the encryption without the knowledge of users and the service provider could have legal repercussions. (Editing by Jui Chakravorty and Mark Potter)