News

Jim Balsillie would like every day to be like Barack Obama's Inauguration Day.

Not because Mr. Obama is a well-known BlackBerry fiend, but because the massive crowd at the National Mall crashed cellphone networks in the Washington area under the weight of celebratory texts, calls and e-mailed photos and videos. Except, that is, for Research in Motion Ltd.'s RIM-T BlackBerry network.

Should Mr. Balsillie, RIM's co-chief executive officer, succeed in his audacious $1.1-billion play for Nortel Networks Corp.'s key patents and next-generation cellphone technology, Mr. Balsillie can ensure that his BlackBerrys continue to work when other wireless devices don't. He can exert even more control over how wireless networks around the globe are built and run to guarantee the BlackBerry system always has pride of place.

“ In five to ten years, you could envision a situation where we run out of wireless bandwidth, and this would position [RIM] extremely well to be a provider of a scarce resource. ”— Canaccord Capital technology analyst Peter Misek

Mr. Balsillie could force cellphone companies that want to use the Nortel technology to tailor their systems to BlackBerrys, to the disadvantage of Apple and its iPhone. He could also deny technology to rivals, or failing that, make them pay up to use it.

In a world that's inexorably eating up what's left of the airwaves and facing a future where every day is indeed like Inauguration Day, that would put RIM in a dominant position, said Canaccord Capital technology analyst Peter Misek.

Punit Paranjpe/Reuters

Jim Balsillie, co-chief executive of Research In Motion, holds the new Blackberry Bold handset during its launch in Mumbai in Sept., 2008.

It's the same idea that underpinned Mr. Balsillie's hostile takeover of Certicom Corp., a Canadian provider of security software for mobile phones that many RIM competitors building handsets cannot do without.

“In five to ten years, you could envision a situation where we run out of wireless bandwidth, and this would position [RIM] extremely well to be a provider of a scarce resource,” said Mr. Misek.

On top of that, the Nortel patents should generate significant income for whoever owns them. Ehud Gelblum, an analyst with JP Morgan Chase, recently estimated that Nortel could collect royalties of close to $1-billion over the next 15 years. Nortel's massive tax losses could also reduce RIM's future income-tax bills.

Those facts go a long way in explaining why RIM wants Nortel. What's harder to figure for many are the tactics that Mr. Balsillie is employing to get what he wants.

RIM argues that it could not and did not submit a formal bid because Nortel blocked attempts. Yet RIM did not use the obvious angle to fight back – a court challenge asking the judge overseeing the bankruptcy auction process to address RIM's concerns and allow a bid.

In a stratagem that mirrors his quest for an NHL hockey team, he has instead tried to start a public-relations war to get his way.

That may be appropriate for a start-up company, and what Mr. Balsillie does in his personal life as he seeks a hockey team is his own business.

Read: A look back at Balsillie's bid

Jim Balsillie suited up to play hockey

The stakes are higher for RIM as it increasingly becomes a dominant player in the global wireless industry. Some who follow RIM are beginning to question whether Mr. Balsillie's scrappy style is still right for RIM, or whether, as one company follower put it, the BlackBerry maker needs to add a “cool, calm, collected elder statesman” to provide a counterweight to the fiery founder.

Mr. Balsillie's game plan by going to the media with his complaints appears to be aimed at generating one of two outcomes: a public and political outcry among those who want a “made-in-Canada” solution rather than a sale to a foreign buyer like Nokia Siemens Networks, or outrage from creditors who think a RIM bid would help them recover more than other options on the table.

Neither reaction seems likely.

“ Before you get to the court, you want to know you have them with you, and the only way to have them with you is to be transparent and have a convincing story.”

On the creditor side, Nortel is confident that there won't be a hue and cry that Mr. Balsillie's bid is much better because bondholders were kept in the loop all the way along.

“The creditors are full participants in the process,” said a source familiar with Nortel's thinking. “Before you get to the court, you want to know you have them with you, and the only way to have them with you is to be transparent and have a convincing story.”

That leaves RIM's main hope in Ottawa, but the early signs there are not promising. Sources told The Globe and Mail that the Conservative government has long been aware that RIM was interested in Nortel, but doesn't feel it would be proper to intervene in a court-run proceeding. Even the opposition Liberals aren't taking up the fight. In the meantime, other bids are emerging.

Unless Mr. Balsillie has another card to play in the Nortel game, he may have to give up on Nortel and focus on his dream of a Canadian champion on the ice.

With reports from Shawn McCarthy in Ottawa and Simon Avery in Toronto

Read: Research in Motion's legal battles