BlackBerry Service Faces Ban In India

Indian authorities were mulling their next step after RIM said it had denied a request by security authorities in the country for access to user data from its BlackBerry e-mail servers.

"It's not possible to do so, because the keys of that service are with the corporate enterprises and corporate entity that owns the server," said Robert Crow, RIM's VP for industry, government, and university relations, in a statement to reporters in New Delhi.

India is concerned that the BlackBerry service, which allows users to send encrypted e-mail messages, could be used by terrorists to plot attacks. India in recent years has been victimized by numerous terror strikes in recent years, including the attacks on the Taj Mahal and Oberoi hotels and other targets in Mumbai in 2008. The attacks left more than 150 people dead.

RIM may believe that providing government authorities with access to its users' data may cause consternation among its high-level corporate customers. But the company's claim that it's technically impossible for it to share BlackBerry data dodges the privacy issue—for now, at least.

In the past, Indian authorities have threatened to shut down BlackBerry service in their country if RIM didn't provide access to user data. With RIM's latest denial, it would seem that the ball is back in India's court, but officials there have yet to say what their next steps will be.

A shutdown of the BlackBerry service could be harmful to both India and RIM. India is the world's fastest growing tech hub, but imposing draconian measures against the leading corporate mobile telecom provider could scare off Western investment in its burgeoning IT sector.

For RIM, the loss of access to the Indian market could mean millions of dollars in foregone revenue and the opening of a door for rivals like Google, with its Android OS, and Apple and its iPhone, to establish themselves as alternatives. RIM said it would continue talks with Indian authorities in an effort to resolve the issue.

RIM shares gained .90% in Wednesday trading on the Toronto Stock Exchange.