Saudi Arabia and smartphone maker RIM (NASDAQ: RIMM) were reported to have reached an agreement over the latter's BlackBerry messaging service in the kingdom. With some 700,000 BlackBerry users, Saudi Arabia is reportedly RIM's largest market in the Middle East.

No information from RIM is available at the time this report was written, though rumors suggest that an acceptable option to make monitoring possible involves channeling traffic from Saudi Arabia through RIM servers that would be set up in the country.

Many users were probably not aware that the robust BlackBerry encryption is not actually applied on all data channeled to the smartphone. As I understand it, chat messages from the BlackBerry Messenger, for example, are sent unencrypted unless the BlackBerry is connected to a BlackBerry Enterprise Server, or BES.

Assuming that the country's BlackBerry traffic is channeled through a RIM server within the country, the logical inference would be that local laws could be amended (or perhaps they already allow) law enforcement officers free access to the traffic that passes through the system. Foreign companies operating in the country worried about whether or not they could continue to rely on BES to keep their communications secure.

The ramifications of RIM's capitulation here would have far-ranging repercussions though.

For more on this story:
- check out this article at CNET News
- check out this article at Computerworld 

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