* Telefonica unveils compensation plans
* Vodafone considering options
* Providers will try to pass costs on to RIM-analysts
* RIM, some users say service recovering
By Kate Holton and Tarmo Virki
Oct 13 BlackBerry maker Research In Motion
faced the prospect of a compensation bill from network
providers on Thursday as it wrestled for a fourth day to get the
world's dominant mobile email service working properly.
RIM said services were starting to improve in all affected
regions, reducing disruption for the millions of users hit by
delays and outages this week.
But significant damage may have been done to a business that
had its share of troubles already, and a hefty bill to
compensate customers could well land at RIM's door.
Spanish group Telefonica said on its website it
would compensate customers, in line with Spanish law, and
Britain's Vodafone is looking at the issue too.
"We are reviewing our options in terms of compensation,"
said a Vodafone spokesman. He would not be drawn on whether such
costs might be passed on to RIM, but analysts said there was
little doubt the British group and other operators would try.
"In the past there have been outages but they have been
limited to an hour here and an hour there and the operators have
been tempted to let that go," said Will Draper, analyst at
"They have not been happy about it but it is not the kind of
thing you go to court over. But this is completely different.
This is a three-day outage. This is 10 percent of your working
month, so I am pretty sure there will be compensation claims and
I am pretty sure they will try and pass it on to RIM, but my
feeling is it will be very difficult to make it stick."
The Spanish Consumer Association FACUA estimated clients
would receive 0.23-1.90 euros ($0.31-$2.62) for each 24 hours of
service interruption. At such a rate, one full day's
compensation to all 70 million BlackBerry users worldwide could
cost the telecoms industry as much as 133 million euros ($183
RIM is unique among handset makers in that it compresses and
encrypts data before pushing it to BlackBerry devices via
carrier networks. Apple and other rivals rely on the carrier
networks to handle all routing and delivery of content.
But other providers are hitting it with smarter handsets and
many with free offerings. Overnight, Apple started rolling out
new version of its iOS software, which includes BlackBerry
Messenger (BBM)-like iMessage service.
"Clearly there are issues. And clearly this has come at a
bad time - just as Apple are launching their rival service to
BBM," said a person at the major European retailer which sells
RIM said there had been a significant improvement for
services and some users said services had started to work again,
although there were still some delays.
RIM co-CEO Mike Lazaridis said in a video posted on
BlackBerry's Youtube channel it was too early to call the
problem solved and he could not estimate time for full recovery.
"We are seeing steady improvements," Lazaridis said. "We
expect to see continued progress, possibly some instability as
the system comes back to normal service levels everywhere."
Singapore employees of global news and data provider Thomson
Reuters were still having problems on Thursday but colleagues in
London, Paris, Amsterdam, Beijing, Tokyo, Jakarta and Bangkok
said BlackBerry service was normal.
The outages -- and RIM's sluggish communications with its
customers -- have fanned rising dissatisfaction Lazaridis and
Jim Balsillie, RIM's other CEO.
Critics have called for a shake-up, saying the top managers
have let the company fall too far behind Apple and other rivals
in a rapidly changing market.
RIM shares have tumbled more than 50 percent this year on a
series of profit warnings and product missteps -- a sharp
reversal of fortune for a company that once dominated its
Anecdotal evidence suggested some users of the device are
"We have lost clients. Two clients changed their BlackBerrys
for an iPhone yesterday here in our boutique," said a salesman
in an SFR boutique in central Paris. "They are not very
But there are those with a BlackBerry in their pocket who
sometimes half wish it wasn't there. "It's been a God-send," one
user joked in an email to colleagues. "Let's hope the bloody
things never work again."