RIM will be forced to cut fees

Troubled mobile phone outfit Research In Motion will be forced to slash the fees it charges carriers for Blackberry service this year, in a desperate bid to stay relevant.

According to Northern Securities analyst Sameet Kanade, RIM, which was once the only option for secure mobile communication, has been too slow to counter the threat posed as companies and governments increasingly allow employees to use their own mobile devices for work.

At the same time carriers are getting less keen to pay RIM’s service’s fee, he said.

According to Reuters, one of the mainstays of RIM’s business, the US government is moving away from the service.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), said it would remove its BlackBerry servers in favour of a quicker alternative that offers support for a more devices.

Kanade said that RIM did not have the luxury of time on its side and suggested his clients sell any stock they have. He also predicted that RIMs shares will fall from $24 to just $7.

RIM’s shares have lost 80 percent of their value since February 2011.

RIM’s BlackBerry 10 smartphones, due later this year, will need a new server software called Mobile Fusion that also allows its core enterprise customers to manage rival devices.

Kanade said traditional software companies and carriers are already introducing similar products at a lower cost. The only way for RIM to compete is to offer its services for a lower price.