According to JPMorgan Chase analyst Rod Hall, the almost four-day BlackBerry service outage can cost RIM over $100 million. The service went down on Monday due to a hardware failure in Europe that caused a backlog on RIM’s servers, that then brought down the service in the Middle East, Africa, India, Brazil, Chile, Argentina, as well as eventually the US and Canada.

RIM has been very apologetic regarding the situation and has changed customers with its progress throughout but has definitely not revealed any plans about compensation for the downtime. During the press conference yesterday, co-CEO Jim Balsillie announced that the service was fully restored. He was asked regarding the matter of compensation, but responded that the business did not know at the time as the focus and priority has been on getting the service back up and running.

Below RIM’s service terms, the company is contractually obligated to maintain a certain ratio of up time for its servers. The nearly four-day outage could have breached the agreement as well as need RIM to pay out punitive fees. However, the company has definitely not confirmed any kind of amounts that it may owe.
Hall’s estimate of $100 million is based on the monthly fee that RIM charges its wireless carriers for each active BlackBerry user. Even though he admits a large margin of error due to the confidentiality of those agreements, he believes that RIM will indeed have to provide a portion of those fees back to the carriers.


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