BlackBerry (BBRY) to Stay Operational in Pakistan

As per Reuters, BlackBerry Limited BBRY will continue to operate in Pakistan after the government dropped its request to access customer data.

In order to ensure security, last July, the Pakistan Telecommunication Authority (PTA) had asked for a country-wide ban of BlackBerry’s enterprise server and Internet and messaging services by Dec 30, 2015.

Repeated terror attacks in the country have compelled the government to closely scrutinize all domestic phone lines and Internet data. BlackBerry is popular for its secure network and messaging service through which data is converted into complex codes which are difficult to assess. Deciphering information from the data bank has been proven to be a tough task for Inter-Services Intelligence (ISI) bureau as well.

Moreover, BlackBerry’s servers, which manage and store all messaging data, are located outside Pakistan, making it harder for ISI. Thus, putting a ban on the service may have helped put a check on terrorist activities in the nation.

Meanwhile, the Canadian smartphone maker enjoys a strong presence in the emerging nations of Asia. Thus, we believe that the ban upliftment will boost BlackBerry’s business in the continent further.

BlackBerry had faced similar bans in India, United Arab Emirates (UAE), Saudi Arabia and Indonesia owing to security reasons. However, the services of the company were resumed with increased limitations.

Meanwhile, the company’s software business continues to gain popularity, thanks to the high-end security features. The company’s BES12 software platform is also gaining considerable traction among corporate clients.

As a result, BlackBerry’s software business witnessed a massive 183% year-over-year improvement in revenues in the third quarter of fiscal 2016 and was also able to counter competition from Apple Inc.’s AAPL iPhone and Alphabet Inc.’s GOOG Android-based devices.

BlackBerry currently sports a Zacks Rank #1 (Strong Buy). Another favorably ranked stock in the same space is Fairpoint Communications, Inc. FRP with a Zacks Rank #1.

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