India issued an ultimatum Thursday to the manufacturer of BlackBerry smart phones: Allow access to highly encrypted information by August 31 or face a blockage of two popular messaging systems.

The real-time messaging services have been under scrutiny because the encryptions make it impossible for intelligence agencies to monitor and, thus, India says, pose a potential national security threat.

India wants law enforcement agencies to gain access to the BlackBerry Enterprise Service and the BlackBerry Messenger Service.

“If a technical solution is not provided by 31st August, 2010, the government will review the position and take steps to block these two services from the network,” a news release said.

What hangs in the balance is the use of BlackBerry for millions in a country with a booming wireless market.

The Indian government has expressed grave security concerns over the use of highly encrypted services. Some find it hard to believe that the world’s largest democracy is taking such a tough stance. But India also has deep security concerns as one of the most-attacked countries in the world.

India was shaken after suspected Pakistani militants attacked Mumbai in November, 2008, leaving more than 160 people dead. In that incident, the government eventually tapped into satellite phone conversations between the terrorists and their handlers, but the attack was already under way.

Vikram Sood, a retired Indian intelligence agent, said India would be completely blindsided if terrorists used BlackBerries to plot an attack and the devices were inaccessible by the government.

The decision will have huge ramifications in India, one of the fastest growing telecommunications markets in the world. More than 600 million Indians use cellular phones, according to the Telecom Regulatory Authority of India; 1 million of those are BlackBerries.

So the loss for RIM is potentially huge in India. If it loses some of the services it offers, it could have a harder time attracting customers.

(Source: CNN)