Saudi Arabia's telecommunications watchdog and mobile operators have reached a preliminary agreement with Research In Motion (RIM) over the handling of BlackBerry data that will involve setting up a server in the country, a person familiar with the talks told Dow Jones. A formal deal between the parties is in the final stages of negotiations, an official at a Saudi operator involved in the talks said. When asked if the agreement involved installing a local server in the kingdom, the person, who declined to be named, said yes. The development follows comments by the CITC that it would ban BlackBerry's instant-messaging service starting 6 August, until the country's three mobile operators fulfill some regulatory requirements. CITC didn't say what those requirements were. The around 700,000 BlackBerry users in Saudi Arabia were largely unaffected by the threatened ban on their services on 6 August. Saudi Arabian authorities told the country's telecommunications operators on 7 August to test a proposed fix to the perceived national security threat posed by Research In Motion's BlackBerry smartphones, and said it would not ban the service if the test was successful. RIM has come under increasing scrutiny from countries including India, the UAE, Lebanon and Algeria that want access to the Canadian company's encrypted network so they can monitor messages they say might signal a potential security threat. The Saudi Communications and Information Technology Commission said it gave the three telecommunications operators, state-controlled Saudi Telecom, Mobily and Zain Saudi Arabia, 48 hours to try out the proposed solution and fulfil the requested regulatory requirements. The regulator's brief statement did not say what the solution was, but a source told Reuters that RIM was testing the use of servers in Saudi Arabia to address government concerns. The CITC said late on 7 August it has extended the deadline for the ban on BlackBerry messenger service until the end of 9 August.
