BlackBerry seeks to get on top of outages

Research In Motion, the maker of BlackBerry smartphones, on Thursday said it was seeing a “significant increase in service levels” after three days of severe disruptions that had spread to 30m-40m people or half of all BlackBerry subscribers worldwide.

RIM said services in Europe, the Middle East, India and Africa were returning to normal as the company worked its way through a backlog of undelivered emails and messages following the failure of a core network switch in a data centre in Slough outside London on Monday.

The Canadian company’s efforts to restore its service in the US and Canada, which were the last countries to be hit by the problems on Wednesday, were “progressing well”.

The problems have outraged BlackBerry users who have had patchy or no BlackBerry email or messaging services since Monday morning. The incident has also raised serious questions about RIM’s oft-touted 99.999 per cent network reliability rating and could encourage both business customers and consumers to look elsewhere.

The outage was first reported on Monday by BlackBerry users in Europe, the Middle East and Africa. RIM claimed to have fixed the problem and to be restoring services that night. On Tuesday, however, as reports of service disruptions spread to India and Latin America, RIM admitted that the problems had spread and blamed the disruption on the failure of a so-called core switch, which routes data traffic across the network. The problems finally spread to the US and Canada on Wednesday.

“In Europe, Middle East, India and Africa, we are seeing a significant increase in service levels. Service levels are also progressing well in the US, Canada and Latin America and we are seeing increased traffic throughput on most services, although there are still some delays and services levels may still vary among customers,” the company said in a statement published on its website at 5am GMT on Thursday.

“Our global teams are continuing to work as quickly as possible to restore full and consistent service across all regions,” it added.

The outage, initially thought to affect mainly consumers, had begun to hit corporate users. Mimecast, an email service company that works with many of the UK’s largest law firms, said about 10 per cent of its corporate clients had reported problems with their BlackBerry service.

Analysts said the ongoing network problems could derail RIM’s attempt to fight back against intense competition from rival smartphone manufacturers, including Apple, which will begin to sell its new iPhone 4S on Friday, and handset makers using Google’s Android operating system.

“It’s a blow upon a bruise. It comes at a bad time,” said Richard Windsor, global technology specialist at Nomura. Some analysts also suggested the prolonged outage could result in claims for compensation from telecom network operators that pay RIM for its BlackBerry data services.

Unlike other smartphone makers that rely on telecom network operators to provide service, RIM operates its own data network, including three network operations centres for its wireless email system: two in Waterloo, Ontario (one for North America, one for Asia-Pacific) and one in the UK for Europe, the Middle East and Africa. All BlackBerry data traffic passes through one of these centres.

Etisalat and Du in United Arab Emirates have already agreed to compensate their customers, while UK operators said they were “considering their options.”

The service disruptions are the worst since an outage swept North America two years ago at a time when RIM’s overseas user base was significantly smaller. They come as RIM struggles to fend of investor criticism of its recent financial performance and management structure while seeking to stem market share losses in the US.

By operating its own network, RIM was able to provide a highly secure encrypted and reliable service when the company had a relatively small number of subscribers, but some telecom experts suggest it is difficult to scale up such a network to handle the traffic generated by 70m subscribers. Insiders say RIM’s management is aware of these problems and has been considering ways to address them.

“While RIM attributes the fault to an unforeseen technical issue, the outages sustain investor concerns over the company regarding the value and relevance of RIM’s proprietary network architecture,” noted Mike Abramsky, an analyst with RBC Capital Markets.

“On one hand, RIM’s network enables BBM messaging and data carriage with high efficiency, encryption and offloads carrier bandwidth – but also affects many more users when it goes down, compared with having each carrier manage messaging for competitors, which may be less efficient/secure, but offers more redundancy.”

Craig Carter of Frost and Sullivan, the UK-based telecoms market research firm, said: “As Apple and Android smartphones continue to cut into RIM’s market share and enterprise players begin to see those manufacturers as viable alternatives, RIM can ill-afford the questions to the company’s reliability that the present outage brings.”

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