UAE and BlackBerry users stick to device as deadline nears

DUBAI (Reuters) - Few BlackBerry users in the UAE are switching to other smartphones even though they face an imminent suspension of services unless maker Research In Motion and the government work out a deal to comply with regulations.

A customer holds a BlackBerry handset at a mobile phone shop in the western Indian city of Ahmedabad August 26, 2010. REUTERS/Amit Dave

Nearly all of the 500,000 subscribers are optimistic a deal will be reached before services are disconnected, with the number of Etisalat’s users holding steady.

“The number of subscribers in BlackBerry has not decreased. It hasn’t been affected yet,” said an Etisalat executive with access to subscriber data.

The United Arab Emirates has said it will suspend BlackBerry Messenger, email and web browser services from October 11 unless BlackBerry maker RIM works out a way locate encrypted servers in the country, so that the government can seek access to messages.

“We are one of the biggest markets for BlackBerry in the Middle East and I am sure a deal will be reached with RIM,” the Etisalat executive said, adding that the deadline could be extended if a final agreement was not finalized by October 11.

Saudi Arabia and India have also threatened to cut off services but have reached an agreement with RIM, and an UAE official said in September the country was “very optimistic” about reaching a deal before the deadline.

Both UAE telecoms operators -- Etisalat and du -- have offered alternative smartphone options, including devices from Nokia or Apple’s iPhone.

The device is popular among the country’s youth and has become indispensable to its business and financial community.

“I haven’t switched, mainly because I don’t think it will be blocked. Other countries found a solution for the issue so we think Dubai will also be able to find a solution,” said Marwan Shurrab, vice president at Gulfmena Alternative Investments.

Experts said the chance of suspension was slim.

“I’m sure it (a deal) is going to go through,” said Shardul Shrimani, telecoms analyst at IHS Global Insight, adding that the disruption to the business community will force companies to rethink their communication strategies.

Information sent from BlackBerries is encrypted and handled by servers outside the UAE. The UAE has voiced concerns over its inability to access the information, citing security and sovereignty issues, and emphasized it was not able to reach a deal since new telecoms regulations took effect three years ago.

“The impact will be a major negative on the business community if the services are cut off and a deal is not reached since Dubai and the UAE is a major business hub,” said Marise Ananian, telecoms analyst at EFG-Hermes, adding the chances of a cut off were minimal.

“The UAE is quite important for RIM so even if they cut off services it would only be for a few days,” said Ananian.

As the clock ticks five days before the cut off date, Nabil al-Rantisi, senior vice president of brokerage at Rasmala Investment Bank, is keeping his BlackBerry.

“I didn’t switch... I think they will reach an agreement,” Rantisi said.

Reporting by Tamara Walid; Additional reporting by Enjy Kiwan