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BBM Channels Service Barred in UAE

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Canadian handset maker, BlackBerry Limited faces yet another hurdle as its newly-launched social networking service BBM Channels were banned by leading telecom operators, Etisalat and du.

In accordance with the regulations of the Telecommunications Regulatory Authority (TRA), the operators have barred the service as it is believed to hamper moral, social and cultural values of the country. However, the users can still access the service through websites.

The BBM Channels service had gained immense popularity since its launch last month. At present, it is available on all BlackBerry 10 and BlackBerry OS devices and is yet to come on iOS and Android platforms. It allows users to launch their own channels connected to their profiles, which other users can follow or share.

BlackBerry failed to introduce any competitive operating platform. Consequently, the company lost its leading position in the smartphone market to Apple Inc.’s (AAPL - Free Report) iOS and Google Inc.’s Android operating systems.

Despite launching its operating platform BB10, the company has failed to revamp its smartphone business. In the last year, it sold nearly 32.5 million smartphones as compared to Samsung Electronics’ 216 million and Apple Inc.’s 136 million handsets. Both, Samsung and Apple took up 30.3% and 19.1% global market share, respectively, while BlackBerry had a mere 4.6% market share in 2012.

As a result, BlackBerry has decided to divest its entire stake to a consortium headed by Toronto-based insurance company Fairfax Financial Holdings Limited for $4.7 billion or $9 per share. Since Fairfax already holds 10% of BlackBerry’s stocks, the buyout will lead to the latter’s privatization. Both Fairfax and BlackBerry have been offered a six-week due diligence period before the transaction can be completed. During this period, BlackBerry can explore better bids.

BlackBerry is also mulling to spin-off its popular BBM service from its handset business. The company already has more than 60 million dedicated BBM followers and is planning to expand its reach. So the company is continuously upgrading its BBM features and has also made the service available to iOS and Android-based handsets.

Similarly, mobile phone giant Nokia Corp. (NOK - Free Report) will be selling its struggling handset business to Microsoft Corp. (MSFT - Free Report) for $7.2 billion. Both the companies have already cleared regulatory hurdles and are expected to wrap up the transaction by the end of first-quarter 2014.

Currently, BlackBerry carries a Zacks Rank #3 (Hold).

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