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BlackBerry facing woes in India's booming market

By Sara Sidner, CNN
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BlackBerry ban in India?
STORY HIGHLIGHTS
  • The Indian government is concerned about security breaches
  • BlackBerry's pin-based messaging system is under scrutiny
  • The government wants access to encrypted information
  • One businessmen says he can't function without the messaging system

New Delhi, India (CNN) -- Indian businessman Paramjit Saluja battles two money-munching time wasters in his auto exports business: New Delhi's trademark traffic jams and the myriad time zones of his clients.

"It's a business killer," Saluja says as he navigates a sprawling traffic mess.

Business would be dead without his electronic angel -- otherwise known as the BlackBerry -- that keeps him connected 24/7. His favorite application? BlackBerry Messenger, a pin-based messaging system that lets him talk to other BlackBerry customers, share images and even voice notes in real time.

But Saluja's angel may soon fly away.

As in Saudi Arabia and the United Arab Emirates, BlackBerry is under serious scrutiny in India because the highly encrypted messages make it impossible for intelligence agencies to monitor and, thus, pose a national security threat.

"Knowledge and information from all sources is necessary, there are no two ways about it," said Vikram Sood, former head of India's External Intelligence Agency

Sood said India would be completely blindsided if terrorists used BlackBerries to plot an attack and the devices were inaccessible by the government.

"So what do you do? React after the fact?" Sood asked. "If you react after the fact, the explosion has taken place or a terrorist act has taken place, 100 people, 150 people have died.

"Who is liable for that? Is BlackBerry going to be liable because it was withholding information in a manner of speaking? So isn't it better to share?" Sood said.

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The situation brings up an old debate brought on by new technologies -- the government's right to know versus consumers' rights to privacy and free flowing information.

A decision is expected Thursday in India, one of the fastest growing telecommunications markets in the world. More than 600 million Indians use cellular phones, according to the Telecom Regulatory Authority of India; 1 million of those are BlackBerries.

So the loss for Research in Motion (RIM), the manufacturer of BlackBerry, is potentially huge in India. If it loses some of the services it offers, it could have a harder time attracting customers.

Telecom operators in the country seem to be hedging their bets. They're working up contingency plans, but not really expecting to lose BlackBerry services, especially considering that RIM was able to make concessions and strike a deal with Saudi Arabia to avoid a ban.

"We think it will all be worked out," said Sanjay Warke, chief executive officer of telecom giant Vodaphone's India operations.

Some find it hard to believe that the world's largest democracy is taking such a tough stance. But India also has deep security concerns as one of the most-attacked countries in the world.

The country was shaken after suspected Pakistani militants attacked Mumbai in November, 2008, leaving more than 160 people dead. In that incident, the government eventually tapped into satellite phone conversations between the terrorists and their handlers, but the attack was already underway.

The technology-versus-security fight is not new in India.

India made similar threats to shut down BlackBerry services two years ago, demanding RIM give the government access to encrypted messages. This go around, New Delhi is also reviewing how to deal with 3G networks offered by private operators.

The government may delay launching the technology, which makes it easier to stream video on cell phones.

For security purposes, telecom providers have to agree to let the government have lawful interception access to their networks in India. But the providers do not have access to encryption keys to unlock all the Internet content that 3G systems can offer users, forcing the government to decide which of the thousands of applications on the internet it will allow.

De-encrypting those applications will be extremely difficult, said Rajan Mathews, director general of the Cellular Operators Association of India.

"We're running into all these issues," Mathews said. "When it comes to technology, do national boundaries mean anything anymore?"

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