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How crisis builds BlackBerry

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The BlackBerry brand in South Africa found itself in the midst of two seemingly disastrous public relations crises in the past two weeks. But, says ARTHUR GOLDSTUCK, both events said more about the power of the brand, and the fall-out gave it even more strength.

BlackBerry is in trouble in South Africa. It has become the most powerful brand in the country.

If those statements are mutually incompatible, it tells you something about perception and reality. The perception is that the brand is under attack, from both Government and the mobile networks. But the reality is that it has become so pervasive in South Africa, any attempt to curb it results in a consumer and media outcry.

The Ministry of Communications has learned this to its cost, and blustered for days to justify its statements. Vodacom ran for cover after its own misstep. The latest incident, on 12 September, saw Vodacom announce ‚a series of steps to improve the customer experience by increasing network capacity and reducing congestion‚ .

According to a subsequent statement released on 14 September, ‚An increase in complaints from BlackBerry users in recent months had been investigated, and it was found that the service was being negatively affected by a very small number of customers downloading vast amounts of data.‚

The initial mistake Vodacom made, however, was to characterise more than 100MB of downloaded data as high usage. In this context, proposing a clampdown on high users appeared to represent a cap on the supposedly unlimited BlackBerry Internet Service (BIS).

And here’s the rub: BlackBerry is the de facto standard in smartphones in South Africa, representing around 70% of smartphones being sold through the networks. World Wide Worx research at the end of 2010 showed that almost a quarter of adult cellphone users living in cities and towns in South Africa intended to buy a BlackBerry next.

In the USA, BlackBerry maker Research in Motion (RIM) is on the backfoot. Despite sales remaining high, in the context of an exploding smartphone market, that translates into rapidly shrinking market share. RIM in North America wishes it had to deal like with crises of the kind the South African office faced.

The attraction in this country is threefold: the unlimited BIS for around R50-R60 a month: the BlackBerry Messenger (BBM) service that has burnt through the teenager and family market like a veldt fire: and the aspirational power of the BlackBerry as a high-end business phone that is accessible to the ordinary user.

In this context, any tampering with the brand would be disastrous for the tamperer. And every such attempt merely reinforces the power of the brand, creating a buzz of consumer solidarity. The media, too, have become BlackBerry co-dependents, buying into that buzz and promoting it into their headlines.

Deputy Minister of Communications Obed Bapela discovered that last week when he declared, in an off-the-cuff statement, that Government was considering legislation to force BlackBerry to open up encrypted messages to the police. This despite the fact that any encrypted messaging is already covered by the Regulation of Interception of Communications Act (RICA) ‚ the implementation of which had every cellphone owner in South Africa scrambling frantically to register their SIM cards. And despite the fact that Research in Motion has already made it clear that it cooperates with authorities in such matters (see its policy here).

The result was a double whammy for the Department of Communications (DoC): it was seen to be ignorant of its own laws: and it was seen to be targeting one brand unfairly. The latter, in the context of BlackBerry’s brand power in South Africa, focused attention heavily on the former perception, to the great embarrassment of the DoC.

The media has moved on, but the DoC persists in making statements about criminals turning to BlackBerry because of the encrypted nature of its communications. The reality is that criminals are turning to BlackBerry because a quarter of the market is turning to BlackBerry. All the DoC is succeeding in is reaffirming ‚ and reinforcing ‚ the power of the brand.

Then came Vodacom. In truth, it is a matter of nuance. The BIS is intended to cover unlimited e-mail, messaging and browsing on the phone. Streaming media, such as movies, video and music, is explicitly excluded. So is downloading such content onto other devices. By Vodacom’s own admission, 95% of users do not use more than 100MB of data a month, making the R50-R60 fee a tremendous money-spinner for the networks.

The nuance in Vodacom’s subsequent statements makes their position clear, but was absent from the first announcement:

‚The BlackBerry service was designed to enable customers to use a BlackBerry smartphone for internet browsing as well as sending and receiving e-mails and messages on the handset itself. This on-device experience is provided for a fixed fee, made possible by the use of the BlackBerry service which compresses data. The device can also be linked to computers and used as a modem, which is called ‚tethering’. Since tethered data does not run via the BlackBerry service, it is charged at normal data rates. The same is also true for video.

‚By using special software and web sites to circumvent the BlackBerry service and by downloading huge files for use off the handset itself, a very small number of customers are abusing the service. This can amount to hundreds of gigabytes of data per user each month. By doing this, this small group has negatively affected the network experience of all Vodacom’s BlackBerry customers.‚

There you have it: the issue is not the 100MB, but the 100GB ‚ a very different matter for the ordinary user.

Even those who do not use as much as 100MB ‚ the vast majority ‚ resent the very idea that they may be capped at that level. It would mean that, when they really need to use more, they would be penalised.

As is his style, Vodacom CEO Pieter Uys immediately took the lead in putting customers’ minds at ease:

‚I’m very concerned that the steps we were planning to put in place were interpreted as punishing normal users. This is not at all our intention and no changes have been implemented to slow down any customer’s BlackBerry service. We are instead working with the makers of BlackBerry, Research In Motion, to find a solution to manage the bulk movie and file downloads, since these are responsible for degrading the service for all other users. By managing this issue we’ll improve the service for all of our BlackBerry customers.‚

The bottom line, for the typical user ‚ and that makes up almost all BlackBerry users ‚ is that there will be no change in their service.

The bottom line, for the networks, is that they dare not tamper with the BlackBerry model while it dominates the market. The brand has become so powerful, consumers associate it with their right to communications. And, in South Africa, an enterprise tampers with basic rights at its peril.

· Arthur Goldstuck is editor-in-chief of Gadget. Follow him on Twitter on @art2gee

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