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No solution for BlackBerry in India, 4 days to go

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MUMBAI, India — Efforts by Research In Motion Ltd., the maker of the BlackBerry, to broaden the debate over data encryption were dismissed by Indian industry groups as unnecessary Friday and appeared unlikely to break a logjam over government demands for access to users’ e-mails by an Aug. 31 deadline.

India has threatened to cut off BlackBerry services for about 1 million Indian users if RIM does not find a way for security agencies to monitor encrypted data.

RIM’s offer late Thursday to lead an industry forum on telecommunications security was widely seen as a last-ditch attempt to broaden the security debate to include other technology companies, such as competitors Nokia and Microsoft, as well as Google and Skype — which have both been singled out by Indian authorities for potential scrutiny.

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, which worry it could be used by militants to avoid detection.

RIM shares slipped to $45.05 in Friday trading on the Nasdaq stock exchange, down 47 percent from a September high and their lowest since April 2009.

RIM officials met for talks with Indian authorities Thursday, but it remains unclear what solution, if any, they have reached ahead of Tuesday’s deadline.

A top telecom official said Friday he’s hopeful of reaching an agreement but that India will not compromise on national security.

“These concerns have been addressed in other parts of the world, I see no reason why the Indian government and agencies should take any risk at all as far technology is concerned,” Sachin Pilot, minister of state for communications and information technology, told reporters in New Delhi.

Pilot said discussions with RIM are continuing and that he is “hopeful” of finding a solution.

“We are not in the business of shutting down services,” he said.

RIM says it maintains a consistent global standard for data access and does not do special deals with individual countries.

Saudi Arabian officials said this month that they would not ban BlackBerry services after reaching a preliminary agreement with RIM to place a server in the country to facilitate monitoring.

The United Arab Emirates has also threatened a ban, while Indonesia and Lebanon have voiced security concerns.

In India, RIM’s offer to lead a security forum revealed tensions between the Canadian company and local players, with one powerful industry group accusing the company of adopting an unhelpful, unilateral approach to negotiations.

“It need not have escalated to this level,” said Rajan Mathews, director general of the Cellular Operators Association of India. “Folks like RIM have to understand business is done differently here.”

He and others said such a forum would be redundant.

In July, India’s Department of Telecommunications laid out strict new security guidelines for telecom equipment makers and service providers. Among them was a call to create a voluntary forum, jointly funded by the government and industry, to strengthen security rules and solve problems, according to a copy of a July notice seen by The Associated Press.

Mathews said his group — whose members include top mobile operators Bharti Airtel and Vodafone Essar — is already working with government officials, equipment manufacturers and service providers to do just that.

“We will participate in the forum that we are creating. Whether RIM is a part of that or not is a different issue,” Mathews said. “We have our mandate from the government and will proceed on that mandate.”

Pankaj Mohindroo, president of the Indian Cellular Association, whose members include handset makers Nokia, Sony Ericsson and Motorola, said mechanisms are already in place to work with the government on security.

“It’s quite already taken care of,” he said. “But if there’s a new initiative we’d be happy to participate.”

In 2008, when security concerns first flared between the government and RIM, the Cellular Operators Association of India was part of talks. In July, the Department of Telecommunications asked the group to reach out to RIM, but RIM preferred to negotiate directly with the government, Mathews said.

He believes that was a bad move.

“Folks come in from Canada and the U.S. and Europe and they get stymied and act surprised that things are going the way they are,” he said. “They need to use local talent and intelligence and understanding of the nuances of the government and bureaucracy. Unfortunately, they rush in and say rationality should prevail. It doesn’t always do that here.”

Mathews, who said he has been briefed on the talks, said RIM has offered to give the government access to messenger services — an instant messaging application for the BlackBerry — but that corporate e-mail access remains a sticking point.

RIM has long maintained that the government can access corporate e-mails by going through corporate e-mail servers, but Mathews said that process doesn’t afford the government enough secrecy.

“The government is saying we don’t want to be in a situation where we find out it’s XYZ corporation responsible for this, and then find out where XYZ corporation has its server, then get in touch with the enterprise. The secrecy of the event vanishes,” he said. “If they’re monitoring someone, they want to keep it confidential.”

He said if a workable solution for de-encrypting corporate e-mail in real time is presented by the Aug. 31 deadline, the government would likely extend the deadline for implementation and not ban services next week.

Asked for the government’s response to RIM’s offer to create an industry forum, Department of Telecommunications spokesman Satyendra Prakash said Friday that the government’s position remains firm.

“It will have to allow full access,” he said. “Otherwise their services will not be allowed.”

RIM officials declined to comment.

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