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. Last Updated: 07/27/2016

MTS Gets Go-Ahead to Import BlackBerrys

bloombergA BlackBerry with Japanese characters. MTS units will have Cyrillic keypads.
Mobile Telesystems, or MTS, the country's largest mobile phone operator, will soon ship its first BlackBerry smartphones into the country and aims to start selling them early next year, a major breakthrough after a two-year scramble for official approval.

MTS said Tuesday that it obtained permission from the Federal Security Service to import about 1,000 units of the popular handset.

The license is a one-off, valid for just one year, but the company said it could be renewed "if all conditions of the agreement were observed."

MTS vice president Mikhail Shamolin said in a statement Tuesday that the company welcomed the "positive decision by regulators to allow BlackBerry services in Russia," and said it would complement other services that the company provides for corporate clients.

MTS originally planned to roll out the service in the third quarter of 2005, after signing a deal with Canadian firm Research in Motion, or RIM, the inventor of the BlackBerry.

But the company had to shelve the plans after it failed to obtain clearance from the "regulators," an apparent euphemism for the FSB.

Last month, MTS teamed up with Alcatel-Lucent and RIM to launch the BlackBerry in Ukraine, making the country the first among former Soviet states to provide the service.

The strong encryption software that the device uses, which does not permit e-mails to be read or analyzed by third parties, is the main reason why the FSB was reluctant to give clearance for the services and could partly explain why it took MTS so long to bring the BlackBerry into the country, analysts say.

Under anti-terror legislation, electronic messages must be available for checks by FSB officials.

Vasily Koval, an analyst with J'son & Partners, said RIM's e-mail encryption system was still "a major concern" for intelligence services, adding that MTS had gotten a one-year "trial license" to test the waters.

"It is a requirement of the law to give unhindered access to electronic communication if and when the FSB requires it," Koval said. "This is a standard requirement in most countries that are in the forefront of the war on terrorism."

The FSB did not respond to requests for comments Tuesday.

In a conference call Tuesday, Shamolin denied that the FSB would have access to its servers or be able to trace the origin of e-mails or analyze them for content.

"As elsewhere, the law only requires mobile operators to allow access to private e-mails during a criminal investigation or when top security issues are at stake," Shamolin said. "This does not imply that we give unbridled access to messages on our servers."

Shamolin hinted in his statement that the FSB would have to specifically request access from MTS on each occasion it suspected criminal activity and that RIM would then have to decode the message before it was passed on to the FSB.

Already a must-have for corporate executives around the world, the handheld wireless device gives users secure access to push e-mail and corporate data in real time, making it an instant hit with business travelers.

RIM's BlackBerry is already available from more than 300 carriers around the world, including in China, where the device debuted last month.

At last count, over 10 million subscribers now use the device worldwide.

MTS would initially offer its Russian subscribers localized, top-of-the-line models, which will come fully equipped with Cyrillic keypads, Shamolin said.

Details on prices are murky, but if the company's services in Ukraine are any indicator, local customers are likely to pay anywhere from $300 to $600 to buy a handset.

In Ukraine, an MTS subsidiary offers the 8700g BlackBerry models for $330. An additional $60 monthly fee allows unlimited GPRS-traffic inside the country.