Bloomberg News

RIM CEO Considers Operator Compensation to Restore Trust

October 17, 2011

(Updates with closing share price in seventh paragraph.)

Oct. 17 (Bloomberg) -- Research in Motion Ltd. will this week consider offering compensation to network operators following one of its worst BlackBerry service disruptions, co- Chief Executive Officer Jim Balsillie said today.

RIM will focus on compensation alongside the offer of one month of free technical support to companies and free online applications, Balsillie said in a telephone interview.

“We’re very focused on these carriers and making sure they’re satisfied with the service operation and making sure we comply with all of our agreements with them and making sure we have their trust for the service going forward,” Balsillie said.

RIM, based in Waterloo, Ontario, may face claims following the disruption after some wireless carriers including Vodafone Group Plc, the world’s biggest mobile-phone operator, offered refunds to some BlackBerry users. Subscribers across most parts of the world, including U.S. and Canada, last week lost data services after a network failure in the U.K. halted messaging and Web browsing.

RIM will give subscribers free access to online applications in games, radio and translation with a face value of up to $100, the company said in an e-mailed statement today.

“This is our offer and we worked systemically over the last three days to make that,” Balsillie said. “That was a pretty comprehensive set of efforts.”

RIM fell 6.6 percent to $22.40 at the close in New York. The stock has declined 61 percent this year.

Confidence Woes

The news comes as billionaire Carl Icahn said in a television interview today that RIM is not in his sights as an investment. In an interview on CNBC Icahn said the smartphone maker is “not on our radar screen” right now. RIM shares rose last month on speculation that the investor activist was interested in buying a stake in the BlackBerry maker.

RIM will roll out further applications to cover all regions of the world as part of the offer, Balsillie said.

“We have apologized to our customers and we will work tirelessly to restore their confidence,” co-CEO Mike Lazaridis said earlier today in a statement. “We are taking immediate and aggressive steps to help prevent something like this from happening again.”

RIM will face “defections” to Apple Inc. after the U.S. company started selling its new iPhone, Matt Thornton, an analyst at Avian Securities LLC in Boston said last week. Apple sold more than 4 million iPhone 4S devices in the first three days, setting a record as customers lined up at stores from Sydney to San Francisco to be first with the device.

RIM, which holds its developer conference in San Francisco tomorrow, will show how the whole BlackBerry platform is “transitioning,” Balsillie said in the interview today. The company, which is trying to revive enthusiasm for its PlayBook tablet after shipments dropped by more than half, will focus its announcements on the device, he said.

--With assistance by Hugo Miller in Toronto. Editors: Niamh Ring, Romaine Bostick

Scott Moritz in New York at;

-0- Oct/17/2011 18:35 GMT

To contact the reporters on this story: Jonathan Browning in London at;

To contact the editors responsible for this story: Kenneth Wong at;

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