Client exodus to push BlackBerry fees down

 

 Research In Motion (RIM) will be forced to slash the fees it charges carriers for BlackBerry service this year, an analyst said on Monday as another United States government customer edged away from the service, cutting into a pillar of the struggling smartphone company's business model. -- PHOTO: AP



(REUTERS) - Research In Motion (RIM) will be forced to slash the fees it charges carriers for BlackBerry service this year, an analyst said on Monday as another United States (US) government customer edged away from the service, cutting into a pillar of the struggling smartphone company's business model.

RIM runs its own network infrastructure, enabling it to encrypt, compress and push data to BlackBerry phones via a cellular network. The Canadian company brought in almost US$1 billion (S$1.2 billion) from this high-margin service last quarter, one-fifth of its total sales.
But a second US government agency in as many months, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), said on Monday it would remove its BlackBerry servers in favour of a nimbler alternative that offers support for a wider variety of devices.
According to Northern Securities analyst Sameet Kanade, RIM - once the only option for secure mobile communication - has moved too slowly to counter the threat posed as companies and governments increasingly allow employees to use their own mobile devices for work. Meanwhile, carriers have soured on paying the BlackBerry service's fee, he said.