Wednesday, Aug 04, 2010

(Adds comments, background)

DUBAI (Zawya Dow Jones)--The United Arab Emirates is open to discussions on a solution instead of a ban on primary Blackberry services in the country, but the decision to suspend services from October remains in place, a top official at the U.A.E.'s Telecommunications Regulatory Authority, or TRA, said Wednesday.

"We remain open to discussions in order that an acceptable, regulatory-compliant solution might be developed and applied," director general Mohammed Al Ghanem said in a statement carried by the state news agency WAM.

But the decision "to suspend certain Blackberry services from October 11. is final," said Ghanem.

The U.A.E. regulator said earlier this week that it would suspend main BlackBerry services in the country, including instant messaging, email and web-browsing, due to national security concerns.

Analysts said the U.A.E.--which is embroiled in a long-running dispute with Blackberry maker Research In Motion Ltd. (RIMM), about how it stores electronic data--was more likely to reach some kind of compromise with RIM before the October 11 deadline than follow through with its decision to shut down some services altogether.

"While the U.A.E. has its security concerns, it also wants to be a modern business hub and so will seek to carefully balance the two imperatives," Hani Sabra, an associate at political risk consultancy Eurasia Group, said in an emailed note.

The two-month lag between the government's announcement and the start of the ban also indicates that U.A.E. authorities want to find a compromise, conveying to RIM "their seriousness about enhancing security in order to get some sort of negotiation process going," Sabra added.

Jawad Abassi, general manager of Jordan-based research firm Arab Advisors Group, said he also expects the U.A.E. government and RIM to reach a compromise. "A technical set up will be reached whereby the government will be able to enforce its regulations where it needs to, though this may affect the demand for BlackBerry," if data is shared, Abassi said.

The U.A.E.'s two telecoms companies moved Tuesday to reassure their customers that they would introduce alternative packages to the services that will be banned. Emirates Telecommunications Co., or Etisalat, and Emirates Integrated Telecommunication Co., or Du--both publicly-listed companies--said they didn't expect the ban to impact earnings. An estimated 500,000 people use Blackberrys in the U.A.E.

Blackberry-maker RIM has come under pressure by authorities in the U.A.E., Saudi Arabia, India and other countries to provide greater access to the encrypted information sent by BlackBerry devices. The Canadian firm said in a statement Tuesday it can't give access to encrypted data and doesn't give any one government special treatment.

-By Nour Malas, Dow Jones Newswires; +9715 0 2890223, nour.malas@dowjones.com

Copyright (c) 2010 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

04-08-10 1336GMT