If you didn’t know already, the encryption for GSM’s antiquated algorithm has been cracked. All 64-bits of it. And guess what…. apparently most carriers haven’t upgraded to the 128-bit algorithm because… well, I’m not exactly sure. I suppose security by obscurity is probably the key reasoning behind this, but A5/1 which has been around since 1988 was replaced by the GSM Association in 2007 with A5/3 but most carriers haven’t bothered to upgrade.
It’s not anything spectacular since the 64bit keys were cracked through brute force, and with the computing power these days along with parallel computing, you can pretty much crack the smaller length algorithms through brute force easily. And this doesn’t allow you to listen in on the calls just yet, it just opens the doors to any of the communication that runs on those bands if the carriers haven’t changed the codes on you not to mention the legality of breaking those codes outside of academic research.
There are a couple ways around this problem. One is to upgrade to a larger key such as 128 bit (which is pretty standard considering many banks run SSL certs on 128 bit encryptions). Not the super-safe, but it does create a lot more combinations to guess through brute force. The other way is through the methodology similar to RADIUS with WPA for Wifi. Wifi keys are easily broken, but if you have a service that continuously rotates those keys and makes it a dynamic password, then any hacker is left with a time limit to break in. From a security standpoint, this becomes a more daunting task.
And as far as iPhones are concerned… oh… if you own one and didn’t know already…(as do most of the world’s mobile devices), they run on GSM carriers. But then again, so will Google’s Nexus One.