Talks between Research In Motion and the Saudi telecom regulator on Thursday made progress toward a final solution for which technical modalities will be hammered out on Friday, a source said.

But an August 6 ban on the BlackBerry Messenger function, decreed by the Communications and Information Technology Commission (CITC) earlier this week, will go ahead pending an agreement, said the source, who has direct knowledge of the talks. Saudi Arabia is RIM's biggest Middle East market.

RIM showed on Thursday a degree of flexibility that has not been there over the past three months. Progress is being made. We started debating the technicalities of new setups, the source told Reuters.

The source declined to discuss what options were on the table. RIM's representatives (at the talks) are supposed to consult the executives at the company's headquarters. They will submit on Friday a final solution.

RIM has, however, required that any solution it proposes be adopted by the kingdom's three mobile phone operators: state-controlled Saudi Telecom, Mobily and Zain Saudi Arabia.

RIM will not engage in one-to-one talks with the operators about any solution it will adopt. They will have to take it, all of them, the source said.

The Messenger ban will go ahead starting Friday as CITC has decreed. A mechanism to segregate the Messenger function from the rest of BlackBerry services has been agreed upon, the source said.

Officials at CITC, including its Governor Abdulrahmane al-Jaafari, its head of technical affairs and spokesman did not respond to requests for comment.

(Reporting by Souhail Karam, Editing by Gary Hill)

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