BlackBerry outage could cost RIM $100 million

Research In Motion’s recent BlackBerry outage was the worst in the company’s history, leaving BlackBerry users in the Middle East, Europe, parts of South America, Canada, Africa and the United States without service for a total of three days. This major outage could cost the Canadian vendor more than $100 million, Financial Post reported on Friday. The costs include refunds RIM may have to issue carriers for monthly fees it collects for each BlackBerry user. “Given a large portion of global traffic looks potentially affected we believe that a 5% impact to service fee revenue is plausible though likely worse case,” JPMorgan Chase analyst Rod Hall said. Read on for more.

Scotia Capital analyst Gus Papageorgiou estimated that lost revenues could be in the ballpark of $117.7 million, or $0.22 per share, but that RIM should have the crisis under control by the weekend. The costs however, do not include the possibility of shaken faith from RIM’s top enterprise users, who rely on BlackBerry products and services for day-to-day operations. RIM co-chief Mike Lazaridis issued a public apology on Thursday in which co-CEO Mike Lazaridis said RIM was “working around the clock to fix this,” and the company stated a few hours later that service had been fully restored.

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