Cellphone snooping now easier and cheaper than ever
Breaking GSM for $650
Cryptographers have devised a low-cost way to intercept phone calls and text messages sent over the majority of the world's mobile networks.
The attack, which requires four $15 Motorola handsets, a medium-end computer and a 2TB hard drive, was demonstrated last week at the 27th annual Chaos Communication Congress in Berlin. It builds off of last year's crack of the A5/1 encryption algorithm  used to protect communications sent using GSM, or Global System for Mobile Communications, technology, which carries an estimated 80 percent of the world's mobile traffic.
The method, cooked up by researchers Karsten Nohl and Sylvain Manaut, is a significant improvement over previous techniques, which required two USRP2 receivers  and software to rapidly change radio frequencies over a spectrum of 80 channels. Equipment costs of the new attack are about $650, compared with more than $4,000 using the previous method.
“GSM is as insecure as Wi-Fi was ten years ago,” Nohl, who is chief scientist at Berlin-based Security Research Labs, told The Register. “It will be attacked by the same 'war-driving' script kiddies soon. Any discussion over whether the attacks available in the community are incomplete or impractical should have been put to rest with the last demonstration so that we can now start discussing how to fix the networks.”
Nohl, a cryptographer who has identified gaping holes in smart cards , cordless phones  and car immobilizers designed to thwart auto thieves , was alluding to comments last year from the GSM Alliance , which claimed eavesdropping on GSM communications wasn't practical.
Nohl has long nudged mobile operators to adopt the significantly more secure A5/3 algorithm, which still isn't widely deployed – presumably because of the cost of upgrading a huge amount of equipment that's already in place. He also counsels them to take several “low-hanging fruit” measures. One fix involves restricting access to the HLR, or Home Location Register, which is the database that keeps track of a handset's location on a carrier's network. Another suggestion is for operators to randomize message padding when encrypting communications.
GSM is the most widely used mobile phone technology. It connects more than 5 billion phones, according to the GSMA. In the US, it's used by AT&T and T-Mobile. It's used by all major carriers in the UK.
The revised attack uses home-brewed firmware to turn the Motorola phones into wire-tapping devices that pull conversations and text messages off of a carrier's base station. They are connected to a PC that has access to a 2TB rainbow table used to decrypt messages protected by the decades-old A5/1 algorithm. H-online.com and Wired.com have more technical details here  and here . Slides from the presentation are here . ®