An update for Blackberry users in the United Arab Emirates could allow unauthorised access to private information and e-mails.
The update was prompted by a text from UAE telecoms firm Etisalat, suggesting it would improve performance.
Instead, the update resulted in crashes or drastically reduced battery life.
Blackberry maker Research in Motion (RIM) said in a statement the update was not authorised, developed, or tested by RIM.
Etisalat is a major telecommunications firm based in the UAE, with 145,000 Blackberry users on its books.
In the statement, RIM told customers that "Etisalat appears to have distributed a telecommunications surveillance application... independent sources have concluded that it is possible that the installed software could then enable unauthorised access to private or confidential information stored on the user's smartphone".
It adds that "independent sources have concluded that the Etisalat update is not designed to improve performance of your BlackBerry Handheld, but rather to send received messages back to a central server".
The concern over this unauthorised access only came to light when users started reporting problems with their handsets.
After downloading the update, users across the country noticed significantly reduced battery life, poor reception and in some cases, handsets stopped working altogether.
Users have complained that the firm's customer service is unable to provide information on the problem. Initial advice led many users to simply buy new batteries.
The update has now been identified as an application developed by American firm SS8. The California-based company describes itself as a provider of "lawful electronic intercept and surveillance solutions".
It is not clear why Etisalat wanted to include the software in the download.
The firm issued a brief statement last week, calling the problem a "slight technical fault", saying that the "upgrades were required for service enhancements".
Etisalat told BBC News that it stands by last week's statement and has not yet responded to further requests for comment.
"There may be a good reason they wanted to install the software," said one Blackberry user in Dubai who did not want to be named.
"But my biggest problem is that my phone won't work. If you call customer service you either can't get through, or they don't know what to tell you. I don't know what to do."
RIM has now issued its own update allowing users to remove the application. Customers of the country's rival service, Du, have not been affected.