Wednesday, Jan 30, 2013
(This article was first published on Tuesday.)
By Rory Jones
DUBAI--Research In Motion Ltd. (RIM.T. RIMM) is in last ditch talks with telecom operators in the United Arab Emirates to provide its BlackBerry Messenger Voice service to customers and avoid launching the new BlackBerry 10 operating system in Dubai without the popular feature.
BlackBerry Messenger Voice, a service that allows free phone calls over Wi-Fi, has become a sticking point for RIM and Dubai-based Du Telecom and Abu Dhabi-based Etisalat Telecommunications Corp., as the telecom operators try to mitigate the adverse effect on traditional revenue streams from free messaging and voice services.
RIM has been lobbying the Telecommunications Regulatory Authority in the United Arab Emirates, which says it would encourage Etisalat and Du to sign up to commercial agreements with the Canadian company to provide the BBM Voice service at an extra cost for customers and win additional revenue.
"We would not want the U.A.E. to be seen as a restrictive case," said a senior official at the regulator who believes that a resolution ahead of BlackBerry's high-profile launch event Wednesday is unlikely.
Both Du and Etisalat declined to comment on the BBM Voice situation.
Analysts say telecom operators in the Middle East are concerned about the transfer of value away from their businesses to voice and messaging applications and Internet companies, otherwise known as over-the-top players.
Etisalat, which is present in 15 countries across the Middle East, Africa and Asia, made revenue in the first nine months of last year of 24.4 billion dirhams ($6.6 billion), while Du, which is present only in the United Arab Emirates, had 7.4 billion dirhams ($1.79 billion) of revenue in the same period.
BBM is arguably the BlackBerry's most popular offering, with more than 60 million active members using the free instant-messaging service. The voice feature became available to download across the world in December, but RIM has been in negotiations with operators in the United Arab Emirates since then. The service could be joined at the BlackBerry 10 launch event by BBM Video, a possible new feature that was leaked on Blackberry-dedicated website Crackberry.com last month and would allow video calls over Wi-Fi.
Analysts say voice and video services would be important features for BlackBerry in winning back market share world-wide from competitors that already offer the services.
Free voice-over-IP providers such as Apple Inc.'s (AAPL) FaceTime, Microsoft Corp.'s (MSFT) Skype and Viber Media Inc. are all banned by the Telecommunications Regulatory Authority for security reasons, as the regulator can't gain access to the content of the calls for what it claims are lawful interception purposes.
But the agency is willing to allow BBM Voice, according to the senior official at the regulator, as BBM is compliant with the country's regulatory framework after a very public spat in 2010 when the United Arab Emirates threatened to ban BlackBerry services for security issues. RIM and the Telecommunications Regulatory Authority eventually came to an undisclosed agreement.
The United Arab Emirates and countries in the wider Persian Gulf remain some of Blackberry's most important global markets where analysts estimate the handset maker still holds a market share greater than its global average.
"BlackBerry is still heavily dependent on [Du and Etisalat] for getting their handsets to market, especially into BlackBerry's historical stronghold in the enterprise segment, who tend to buy postpaid packages with subsidized handsets," said Edwin Grummitt, head of Middle East at Analysys Mason, a consultancy based in London.
But if RIM and Du or Etisalat fail to reach an agreement, BBM Voice won't be available in the United Arab Emirates in time for the press launch Wednesday of BlackBerry 10 in Dubai, which joins New York, Toronto, Paris, Johannesburg and London as one of the global showcase cities. RIM hasn't said yet when the devices actually will start selling in these markets.
"We continue to work closely with our partners in the United Arab Emirates to bring BlackBerry services to our customers," RIM said in a statement.
"We undertake rigorous due diligence with all BlackBerry product and service launches to guarantee the functionality, features and rich user experience that our customers have come to expect, while ensuring that they comply with the regulatory framework of the countries within which we operate," RIM added, while declining to comment further on its talks with the United Arab Emirates telecom companies.
Write to Rory Jones at rory.jones@dowjones.com
(END) Dow Jones Newswires
30-01-13 0352GMT
