(AFP) – Aug 7, 2010

JEDDAH, Saudi Arabia — BlackBerry has "virtually" sealed a deal with Saudi Arabia on its encrypted messenger services to avert a ban on the smartphone, a Saudi telecoms company official told AFP on Saturday.

"A deal has been virtually reached and we are in the process of adding the final touches," said the official of one of Saudi Arabia's three licensed mobile operators, asking not to be named.

The official declined to go into details.

The Saudi-financed satellite television Al-Arabiya, citing unnamed Saudi sources, said BlackBerry's Canadian makers have agreed in principle to grant access to Saudi authorities to decipher its messenger exchanges between users.

A special server for the messenger services is to be set up in the highly security-conscious Gulf state, birthplace of Al-Qaeda and its leader Osama bin Laden, according to Al-Arabiya.

Earlier on Saturday, an official of a mobile phone company reported progress in talks with BlackBerry's manufacturers, Research In Motion (RIM), in a bid to have the device conform with Saudi laws.

"A solution is in sight with the Canadian company," the official said.

Only last week RIM founder and co-chief executive Mike Lazaridis, however, told the New York Times that letting governments monitor messages would imperil ties with clients, including major corporations and law enforcement agencies.

Stepping into the fray on Thursday, the US and Canadian governments said they would hold talks with those countries fearful of the security implications of BlackBerry usage.

Several BlackBerry subscribers in the Saudi port city and business hub of Jeddah said on Saturday that the service had been working uninterrupted since it was reinstated after a four-hour suspension the previous day.

The Saudi telecommunications authority announced earlier in the week it had ordered mobile providers to block key BlackBerry services or face a 1.3-million-dollar fine as of August 6.

The regulator had said the suspension was because "the way BlackBerry services are provided currently does not meet the regulatory criteria of the commission and the licensing conditions."

BlackBerry's encrypted emails and data are stored on servers in Canada, where RIM is based, meaning that third parties such as intelligence agencies cannot monitor the secure communications.

BlackBerry subscribers number around 700,000 in Saudi Arabia, a conservative kingdom which enforces a rigid Islamic social code and strictly censored Internet service.

The brief Saudi shutdown came five days after the United Arab Emirates announced it would also cut off BlackBerry messenger, email and web browsing services on October 11 because of security fears.

Industry sources said a Saudi-RIM deal could serve as a model for other countries with similar concerns, especially the business-orientated UAE which has said its decision was "final" although open to negotiation.

With the priority on business, Bahrain and Oman say they oppose a ban on BlackBerry, a favourite tool of business travellers, while Lebanon, a frontline state with Israel, has yet to reach a decision despite its security concerns.

Outside the Arab world, India has said it is mulling a ban, and Indonesia is not ruling out the option although on Thursday it denied the world's largest Muslim country was considering a suspension of BlackBerry services.

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