BlackBerry overcomes Indian roadblocks but Google, Skype see trouble ahead

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According to Sachin Pilot, minister of state for communications and information technology, if national security "concerns have been addressed in other parts of the world, there is "no reason why the Indian government and agencies should take any risk at all as far technology is concerned."

The Home Ministry has also made it clear that any communication through the telecom networks should be accessible to the law enforcement agencies and all telecom service providers including third-parties have to comply with this

Currently, RIM provides "encrypted data stream" to Indian security agencies but the agencies have complained that the encrypted data is very difficult to crack and they want RIM to now provide access to encrypted messages in a readable format.

The government especially wants to monitor and access RIM's BlackBerry Messenger and BlackBerry Enterprise Service. While BlackBerry Messenger service offers a secure chat facility to BlackBerry users, BlackBerry Enterprise Service allows corporate users to create their own unique "master keys" to communicate amongst themselves on a Virtual Private Network (VPN) to which RIM even doesn't have access.

RIM has so long claimed that it will be unable to comply with the government's order as "governments have a wide range of resources and methodologies to satisfy national security and law enforcement needs without compromising commercial security requirements."

The company also said it was helpless as "BlackBerry security architecture for enterprise customers is purposefully designed to exclude the capability for RIM or any third party to read encrypted information under any circumstances."

However, faced with a nationwide ban of its services if it did not comply with the government's order by August 31, RIM offered, Monday, to provide the government with certain technical solutions through which government security agencies will be able to monitor data transmission over its network.

"RIM has made certain proposals for lawful access by law enforcement agencies and this would be operationalized immediately. The feasibility of solutions offered would be assessed thereafter," the home ministry said in a statement, Monday.

The government said it has begun testing RIM's monitoring tools starting today and would review within 60 days its effectiveness. If the government is not satisfied, it will ask RIM to locate server in India. Currently, RIM's servers are hosted in the UK and Canada.

RIM's decision means nearly 1.1 million BlackBerry users in India will come under government surveillance. However, RIM, which has so far resisted demands to allow access to the data transmission, had no choice - India, with over 636 million mobile subscribers, is the world's second biggest mobile market and is one of RIM's key markets for growth.

However, RIM's decision to give in to the government's demand has put Google and Skype, which offer communication services over the Internet, on a sticky wicket.

According to a senior government official, the home ministry is now mulling sending notices to Google and Skype to allow its security agencies access to its Internet data by setting up their servers in the country.

"They have to install servers in India" and "this applies to all," Home Secretary G.K. Pillai told reporters on Wednesday.

"Any communication through the telecom networks should be accessible to the law enforcement agencies and all telecom service providers, including third parties, have to comply with this," the Home Ministry said in a statement.

Google did not give any comment. Skype, whose investors include eBay Inc. and buyout firm Silver Lake of Menlo Park, California, said it hasn't received any notification from the government yet. Skype phone is the world's most popular Internet telephone and video calling service, boasting of a total 560 million registered users.

According to industry analysts, Google and Skype are likely to comply with the government's order as India is a key market for Internet and telecommunications service. With India set to roll out 3G network nationwide within the next few months, companies like Google and Skype are expected to benefit the most.

Romal Shetty, head of consulting firm KPMG's Indian operations, said the government too was left without any choice " "[The government] has to balance between our security and privacy concerns," Shetty said.

However, Shetty warned that RIM's decision could have "various ramifications."

If RIM allows India to monitor data that's being transmitted over its secure network, then "every other country may want a similar thing and then the whole issue of efficiency and management of the services and data will become difficult," Shetty said.

Agrees Prashant Singhal, head of the telecommunications division at Ernst & Young India. "With some of the countries where discussions were on or are still on, like Saudi Arabia, governments may go back and ask for security codes, following in India’s footsteps," Singhal said. "Most governments are going to ask for the same security solution RIM has offered." RIM is in talks with Saudi Arabia, United Arab Emirates, Indonesia and Turkey over security concerns.

Meanwhile, the companies impacted by the government's directives are complaining of its unhelpful, unilateral approach to negotiations and warned that the government's action could discourage international companies from doing business within its borders, Pilot said that's untrue.

However, the government disagrees. "We are not in the business of shutting down services," Pilot said, adding that the government is hopeful of finding a solution that agreeable to all.

Agrees a senior government official, requesting not to be named. "We are not eager to ban the BlackBerry service," the official said.
"But we are also not eager to compromise on national security," he added.

Not surprisingly, RIM's rival Nokia Oyj has already announced it would set up servers in India by November 5.