Security unaffected by Saudi deal

MONTREAL — Research In Motion isn’t expected to compromise security for its business users despite an apparent agreement with authorities in Saudi Arabia to monitor BlackBerry services like instant messaging.

MONTREAL — Research In Motion isn’t expected to compromise security for its business users despite an apparent agreement with authorities in Saudi Arabia to monitor BlackBerry services like instant messaging.

So far, the Canadian tech giant (TSX:RIM) hasn’t commented on its negotiations with Saudi Arabia, one of several Middle Eastern countries to complain about a lack of local access and control of BlackBerry data, including email.

Technology analyst Nick Agostino said Monday that RIM may allow encrypted information to flow through wireless carriers in Saudi Arabia before it gets to the company’s overseas servers.

“It’s kind of like building a highway (and) putting a glass ceiling over it. But you can’t actually go in there and touch the cars,” said Agostino, of Toronto-based Mackie Research Capital.

“You can’t get in there, but at least they (the Saudis) get the comfort that they have a sense of control,” he said.

“I don’t think they compromise their security,” he said of RIM.

Agostino said that means RIM could install a local network connection within Saudi Arabia, giving officials a chance to look at the flow of data before it reaches RIM’s overseas servers, but that’s all.

Such information sent by business users is encrypted and Waterloo, Ont.,-based RIM has pointed out that even it doesn’t have access to the data to be able to unscramble it.

The Associated Press reported Monday that RIM had reached a preliminary agreement with Saudi regulators that would allow the government some access to users’ data, and that authorities were examining how such a system might be implemented.

U.S.-based analyst Matt Robison said he doesn’t think putting in a network node in Saudi Arabia as unique because RIM has got them in other parts of the world.

“Some people may view that as succumbing to the pressure, but there’s going to be some quid pro quo at some level,” said Robison, of Wunderlich Securities Inc.

“I don’t see it as that big of a deal,” he said from San Francisco.

Robison said installing a network point could result in RIM being able to negotiate ongoing service with the Saudi wireless carriers.

RIM won’t have compromised security for its businesses users because the company says it doesn’t store or have access to the encrypted data, he said.

“I think the legitimate consumer is not going to care,” he said. “I think it’s very marginal in terms of the subscriber impact.”

Middle Eastern countries like the United Arab Emirates as well as China, India and Indonesia have all expressed concerns about not having access to BlackBerry users’ data. Critics say the push for local control is to monitor speech and political activity.

The Canadian tech company has built its reputation on providing secure information for its business customers, although there isn’t the same level of security for BlackBerry’s consumer users.

The BlackBerry maker is trying to sell more smartphones internationally as competition intensifies in the mature North American market with Apple’s iPhone and Google’s Android-powered smartphones.

Shares in RIM closed up $1.87, or 3.4 per cent, at $56.80 in trading Monday on the Toronto Stock Exchange.

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