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December 13, 2011

Research In Motion (RIM) simply can't seem to get a break these days. After having some issues with the Indian government earlier this year, now it finds itself in hot water again, this time with another foreign government: Indonesia.

The country is threatening to cut off BlackBerry data services if RIM doesn’t locate a data server in the country, as it promised earlier this year. Back in January, RIM made four commitments to the Badan Regulasi Telekomunikasi Indonesia (BRTI), Indonesia’s telecommunications regulator.

One was that it would establish a network of over 50 BlackBerry Expert Centers throughout Indonesia. The second promise was that it would work with Indonesian law enforcement officials to provide lawful access to messages and emails from suspected criminals.

RIM's third commitment was that it would restrict access to pornography on its network. Four, RIM said that it would establish a “regional network aggregator” to which Indonesian wireless carriers could connect to ensure they’re getting decent data speeds that could fit in an enterprise environment.

Apparently, the Waterloo, Ontario-based company delivered on all four promises. However, it didn’t carry out the fourth one in quite the way the BRTI originally asked. Instead, RIM physically placed the data center in Singapore, which is not geographically all that far, but nevertheless a different country and not nearly as regional as the BRTI would have liked.

And further compounding an already bad situation, Indonesia has been asking for a local server for nearly three years, and after all that time, it is still waiting.

So the BRTI isn't happy at all with RIM anymore. It’s outraged enough right now that Indonesia said it plans to make a local server a precondition of RIM’s continued operation in Indonesia. BRTI commissioner Heru Sutadi said that RIM must provide the local server if it wants to continue to operate its BlackBerry Internet Service and BlackBerry Messenger in the country. If it doesn’t do exactly as BRTI asks, those services could end up being cut off almost immediately.

Finally reached for comment, a RIM spokesperson said that while the company has been working closely with the Indonesian government, it has not been advised of any specific requirements extending beyond what it has already done. The statement in full appears here:

RIM has been working closely with multiple government bodies in Indonesia, but has not been advised of any specific technical requirements extending beyond what it has already satisfied in writing to the Ministry of Communication and Information Technology (MOCI) on September 23, 2011.

RIM continues to discuss a new, potential investment in Indonesia that would support the growth and expansion of the country’s software development industry and RIM expects to provide further details at a future date.

On September 23, 2011, RIM notified the MOCI in writing that it has fully addressed all of the requests made to it by MOCI in January of 2011. This included notification that:

1 -- RIM has established a network of 50+ BlackBerry Expert Centers throughout Indonesia and superior after sales support.

2 -- RIM is working with Law Enforcement Agencies in Indonesia for the provision of Lawful Access as stipulated by national law.

3 -- RIM has completed the establishment of a regional network aggregator. Many Indonesian wireless carriers are now connected, addressing the specific stated concern of MOCI, which applied strictly to the speed of data flows.

4 -- RIM has established a content filtering system, per the requirements outlined by the government. BlackBerry continues to provide safe, secure and reliable communications for its users.

It will be interesting to see how this goes in the next few weeks. In January, RIM had granted India access to its proprietary smartphone network. But there was a condition: the ability to monitor secure customer emails has been removed.

RIM has confirmed Friday that the Indian government now has the means to access its Messenger service. "Research In Motion has delivered a solution that enables India's wireless carriers to address their lawful access requirements for our consumer messaging services, which includes BlackBerry Messenger Server (BBMS) and BlackBerry Internet Services (BIS) email," RIM said in a statement.

However, the Waterloo, Ontario-based company insisted that the access doesn't include the ability to monitor emails on its BlackBerry Enterprise Server (BES), which it sees as a secure virtual private network (VPN) solution for corporate customers.

The company also maintained its position that the emails on its BES system are fully encrypted and that it has no means and has no intention to unencrypt any of that data. RIM is very stringent when it comes to corporate security.

Since last year, RIM has been under a lot of pressure to satisfy the Indian government's demand for access to the BlackBerry network. The company averted a ban on BlackBerry services in October by providing an interim solution to the country and promising a permanent solution by the end of January 2011.

In other mobile news

The ISIS Consortium says it has awarded the contract for running its NFC payment platform to Gemalto, claiming that about 68 percent of pay-by-tap transactions will end up being routed through the company's secure system.

ISIS can make that claim as it counts AT&T, T-Mobile USA and Verizon as its current members.

The Consortium will be managing the deployment of NFC (near field communications) secure applications using the technology, including proximity payment systems from the likes of Visa and MasterCard.

In November 2010, Verizon Wireless, AT&T Mobility and T-Mobile USA created a mobile payment system designed to help wireless users easily pay for certain items at physical stores using their mobile phones and MIDs (mobile Internet devices), the three wireless carriers have said earlier today.

Dubbed 'Isis', the three companies are building the new payment network with the initial goal of setting up a system in which people can use smartphones to easily pay for products or services directly at a retailer, known as PoS (point-of-sale) purchases. A similar system has already been in place for the past two years in many Asian countries.

The new solution will use a technology called NFC (near-field communication), which provides short-range and encrypted wireless communications between different mobile devices. The three carriers say the system will include strong security and privacy protection.

That places ISIS in direct competition with Google Wallet, and while ISIS may come a bit late in the game, it still plans on getting the lion's share of this rapidly growing multi-billion market.

Overall, Near Field Communications technology is a short-range radio frequency system being built into high-end smartphones, amongst other things, and once it's linked to a secure element, then it can be used to make payments with a tap of the phone.

However, the exact location of that secure element is still open for debate. For its part, Google Wallet embeds it in the phone itself, while ISIS would prefer to see it embedded in the operator-owned SIM (Subscriber Identity Module). SIM's are uniquely managed and controlled by wireless carriers, and is an area that they want to keep close to their hearts for obvious commercial reasons.

In March of this year, MasterCard's PayPass Division approved Gemalto's new NFC payment software platform to handle transactions on a SIM card. The new secured system runs on Gemalto SIM chips, allowing a wireless network operator to host a PayPass application on its SIMs.

Once such a SIM is inserted into a NFC-capable mobile handset or smartphone that supports the SWP protocol, the network operator or wireless carrier could offer MasterCard the ability to provision PayPass to that customer.

NFC is the short-range (up to 10 cm or 4 inches), high frequency wireless communication technology that wireless carriers hope to employ in their aspirations for a nationwide mobile banking network. The technology allows devices such as smartphones and MIDs to collect or transmit data to another NFC-enabled device without manual configuration to identify mobile devices.

Gemalto makes SIMs capable of supporting an NFC secure element, but that's not part of this deal. This announcement is that the company will be providing management software, capable of securely communicating with applications, including payment applications, running within a secure element of any kind, and relaying that communications to a payment provider or similar service.

For instance, MasterCard could create an ISIS-compatible version of it's PayPass (proximity payment) application. The credit card giant won't distribute that application however, since it will be the banks which offer it to their customers, just as credit cards are offered today.

That application will then be distributed to ISIS-compatible wallets, when all communications will (for as long as this contract lasts) fall to Gemalto's Allynis Trusted Service Manager software.

For now, nobody is saying how much the deal is worth to Gemalto, or how long ISIS has committed to using the company's software, but Gemalto did tell us it's investing considerable resources into the U.S. to support the expected avalanche of users and that the contract is long enough for it to recoup that investment. Gemalto is based in the Netherlands.

ISIS expects its first users to come on line around mid-April 2012, but mass deployment will follow as the technology gets more support from mobile handsets and the general public.

This is a big win for Gemalto, no mistake about that. ISIS will probably be the world's largest Trusted Service Manager for some time to come, so Gemalto is now in a very strong position to reap a decent proportion of other NFC platforms as they launch around the world.

Visa and MasterCard are currently in a race against each other to be the first to offer NFC (near field communications) payment technology on mobile devices for next year's Olympics in London, and this race has been going on for many months now.

And Samsung's Olympic Phone won't be the only mobile device able to make payments since Visa is planning an operator bypass with a microSD card.

Samsung's payment-enabled Olympic Phone will be sold around the globe, according to Visa's latest presentation to European bankers, but more interesting is the suggestion that Visa will be adopting a microSD alternative for mobile devices that don't have NFC built in, removing the need for an operator partnership with the wireless carrier.

Samsung's new Olympic Phone is supposed to handle security and payments a well. But for any secure application, including payments, a mobile operator is needed as Visa has committed to putting the NFC secure element on the SIM card which is controlled by the mobile operator.

Samsung, an Olympic Worldwide Partner, will be providing the as-yet-unrevealed mobile handsets free to athletes at London's 2012 Olympic games, and selling the device around the world. Visa, also a Worldwide Partner, is providing the payment terminals for the whole event, so the Olympics will be PayWave only.

Lloyds will be underwriting the payment system pre-installed on the mobile handsets, but to complete the set, a user needs a network operator and there aren't any on the sponsorship roles of the Olympics, at least not for now.

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Source: Research In Motion.

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