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August 10, 2010
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COMMUNICATION BREAKDOWN:What’s the true cost of Dubai’s row with RIM?




Although an agreement between the Blackberry manufacturer Research in Motion and various nations over security was always likely to be reached, Pete Roythorne looks at whether the reputations of those countries as global business hubs has now been irreparably tarnished.


With the second deadline for the suspension of Blackberry services in Saudi Arabia passing earlier this week, it looks almost certain that a potential global mobile communications crisis is likely to be averted. Talks between the handset’s manufacturer, Research in Motion (RIM), and the Saudi government are reportedly continuing to show “positive development” and this latest gesture would appear to be giving RIM more time to work on an acceptable solution. Although Dubai remains tight-lipped over its position, it would also seem a fair assumption that any deal struck in Saudi will be acceptable to Dubai as well. But the damage to these destinations as global business travel hubs may already have been done.

The row, which erupted last week, has centred on RIM’s refusal (or inability, according to the company’s press) to give governments unencrypted access to the communications of Blackberry users. The rumblings of discontent started in Dubai and were soon joined by a range of nations, including Saudi Arabia, Kuwait and, probably most importantly, India.

To be honest, there was only ever likely to be one conclusion to this, and that was RIM yielding to government pressure so as not to alienate itself from a string of extremely lucrative markets. And while the interests of national security should never by ridden roughshod over by corporate desires, RIM now finds itself in a potentially awkward situation; having bowed to pressure from the Middle East and Asia it has undermined one of the core USPs of its handsets, namely security.

 

Secure lines: Blackberry security has been attacked by the UAE, but
could this backfire on their popularity as business destinations?

 

Meeting global security needs
Although western nations have not taken a similar stance with RIM, its residents will be exposed to the same conditions of use for the handset should they venture into the nations currently challenging RIM’s stance. With Blackberry being the mobile email system of choice for most businesses, while not as calamitous for business travellers as an outright ban on services, it could still raise some uncomfortable issues with nations like Dubai already being a major international business hub, and India keen to establish itself as a leading destination for the global meetings and events industry.

“I really can’t see a positive spin on this as far as international business is concerned,” says Rob Nicholas, managing director at Dubai-based publisher NPI. “The UAE is trying to become an international financial centre, a hub for knowledge-based enterprise with Dubai Media and Internet Cities, Healthcare City and a range of other freezones. By challenging RIM, the UAE has now very publicly advertised its Big Brother-style approach to communications and this does not align with its objectives of becoming the regional centre of choice for global commerce and industry.”
 
Nicholas continues: “BlackBerry is a choice that businesses make because, rather than in spite of, its security. Multinational corporations have invested in BlackBerry Enterprise Servers, issue BlackBerrys to their employees and expect them to be available to answer emails and access their corporate networks securely as required while on the move.”
 
Inconvenience factor
Meetings technology speaker, consultant and writer, Corbin Ball echoes Nicholas’ thoughts. “I am disturbed by this regressive move and believe it will have a negative impact on meetings in these regions and send a chilling message to people doing business there on the openness of the governments. The reality is that RIM has the largest share of the global smart phone market (about 45%) and its use is primarily for business. Any move that restricts or inhibits its use will be an inconvenience to business travellers and meeting attendees going to these destinations.”

Indeed, Ball thinks this could have a serious effect on inbound meetings business in the countries questioning RIM.

“Mobile technology is becoming increasingly important at events, and open access to the internet via all devices, especially mobile ones, will be increasingly important," he says. "With increasing frequency, venues will be chosen for strong technical support capabilities – good internet access, wifi, etc. This move sends exactly the wrong message to those making these choices. A country that is known as being technologically regressive will not be a draw for event planners, tradeshow managers, exhibitors and attendees.”

Martin Sirk, chief executive of ICCA, believes there are bigger issues for the global meetings industry from a technology perspective and that some sort of deal with RIM was always inevitable.

"Smartphone use at meetings is entering a phase of massive growth and innovation, and if RIM can't come to an agreement with those countries that are not allowing full Blackberry functionality, this could impact on its competitiveness as meetings destinations," he says. "But I'm pretty certain that an agreement will be hammered out in the near future, since RIM is selling Blackberries to global travellers, and those individuals will demand to be able to use their handsets wherever they travel. At the moment, the issue of adequate wifi availability, ideally free availability, is actually a far bigger global challenge."

Motivated by profit
Despite his own view, Ball believes that, at the end of the day, it is profit that will continue to drive people into these regions.

“As long as there is profit to be made, foreign business people will find their way to these destinations, although less conveniently,” he says. “However, the governments in question are giving the message that they care more about being able to control information flow than providing for a more convenient way of communicating and doing business. It is very puzzling to me that a country like Dubai, which has strived to be a business and tourism haven of the region, has made such and anti-business and tourism move. This sets a very disturbing precedent.”

As Ball points out, the business community is pretty resilient in its pursuit of profit and is unlikely to be completely deterred from using any of the destinations in question because of their stance over Blackberry security. But even if a compromise is reached, the true impact of the PR message that this row has sent out will be difficult to evaluate for some time to come.


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