India BlackBerry ban averted

A ban that would have seen Research In Motion Ltd.'s BlackBerry devices banned in India has been averted, and the company has been given 60 days to finish a security fix.

Citing security concerns, India had threatened to ban the devices across the country by Aug. 30, based on concerns that security agencies can't access information sent on RIM's secure network.

RIM's messenger, email and web services are sent over a distinct, encrypted network.

It is not clear what sort of concession RIM has offered, but the Indian Ministry of Home Affairs said in a statement Monday it would review the company's security proposals over the next 60 days after the Department of Telecommunications studies the feasibility of routing BlackBerry services through a server in India.

"Finding the right balance to address both regulatory and commercial needs in this matter is an ongoing process, and RIM has assured the government of India of its continued support and respect for India's legal and national security requirements," the company said in a statement late last week.

India is one of the world's largest cellphone markets, with 675 million wireless subscribers. There are currently only about one million BlackBerry users in the country.

RIM is facing widespread concern over its strong data encryption, which is beloved by corporate customers eager to guard secrets, but troublesome for some governments in the Middle East and Asia that worry it could be used by militants to avoid detection.

Thus far, Saudi Arabia, the United Arab Emirates, Indonesia, Lebanon and India have asked RIM for access to its secure networks, something the company has consistently said it is technically impossible to provide.

The controversy sent Research In Motion's stock price to a 16-month low on Friday.

RIM maintains that it has a consistent global standard for data access and does not make special deals with individual countries.

PricewaterhouseCoopers executive director Sandeep Ladda said it would have been politically difficult for India to ban BlackBerry services Tuesday, given the number of Indian users.

"There could have been a public uproar," he said. "A lot of negative publicity on the government of India would have come up in the media."

Striking the right balance between national security and corporate privacy is especially important to Indian outsourcing companies that are eager to protect client data.

"India is termed an outsourcing hub for the U.S. and Europe, so data security is a primary issue. If there is any data leakage, we lose business," said Chetan Samant, a manager at a software association. He said he personally would be sad to part with his BlackBerry. "Once you get used to it, it's an addiction," Samant said.