BlackBerry Hit by Service Outage

By: Lily Vitorovich and Jessica Hodgson, Wall Street Journal Email
By: Lily Vitorovich and Jessica Hodgson, Wall Street Journal Email

BlackBerry suffered another setback Friday, with a new round of service problems in Europe, the Middle East and Africa, less than a year after a network outage knocked out handsets around the world.

The timing of the latest setback couldn't be worse for the Waterloo, Ontario-based company, coming on the day Apple Inc.'s latest incarnation of the iPhone is delivered to customers around the globe.

For several hours before service was restored, customers in Europe, the Middle East and Africa couldn't send or receive emails. In a statement, RIM apologized to customers that had been affected. "We can confirm that services have been restored and are now operating normally," it said.

The company didn't provide a reason for the malfunction.

Like former market leader Nokia Corp., is fighting to regain market share lost to newer smartphones like the iPhone and handsets, that are mainly powered by Google Inc.'s Android platform and that are attracting both consumers and corporate users. Apple formally started delivering the latest incarnation of its iPhone in nine major markets on Friday. The company has said initial sales of iPhone 5, which began last week, have topped two million units within the first day of taking pre-orders, setting a new company record.

It wasn't clear how widespread the problem was. Vodafone Group, the world's biggest mobile operator by revenue, said their BlackBerry customers in numerous European countries had been affected, including U.K. germany, Italy, Spain and Greece.

A U.K.-based Vodafone spokeswoman didn't know the cause of the problems and had told customers to contact BlackBerry directly.

A spokesperson for Telefonica SA's business in the U.K. earlier said it was investigating the matter in discussion with RIM.

An emailed statement from EE, the U.K.'s biggest operator, said as far as it was aware its customers weren't affected by the issue.

A spokesman for Deutsche Telekom said he had no information on Telekom customers facing problems using BlackBerrys.

BlackBerry suffered its worst network outage in October 2011, when its email, instant messaging and browsing were disrupted around the world for up to three days in certain regions. RIM later promised to bolster its infrastructure to prevent another such incident.

BlackBerry has suffered other similar incidents. BlackBerry devices on different carriers across the Americas suffered service interruptions over the course of a week in December 2009 due to a glitch in its instant messaging service. And in January 2008, millions of users across the U.S. were left without access to emails during a similar outage. In April 2007 email was knocked out for around five million BlackBerry users across North America due to a software update.

In January, reacting to mounting pressure, RIM pushed through a major corporate overhaul, replacing long-term co-Chief Executives Jim Balsillie and Mike Lazaridis with Thorstein Heins, previously a chief operating officer.

RIM has started delivering prototypes of its new smartphone devices to carriers in a push to convince them that the new generation BlackBerry can compete with iPhone and Android devices. But so far investors appear unconvinced that the company has addressed its problems.

RIM's stock has fallen over 70% in the past 12 months amid the growing dominance of Apple and Android, amplified by problems including profits warnings and product delays. Over the same period, Apple's stock, by contrast, has gained almost 70%.

RIM is already "under attack" from competitors and the analyst community, and the latest woes are "going to further compound its problems," Nick Dillon, a senior analyst for research firm Ovum said.

Click here to read more from the Wall Street Journal


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