The encryption system used for GSM mobile phones has been demonstrated to be fundamentally flawed and is crackable. But to be honest what is most surprising is that it has taken until now for the security of the 20-something years old encryption system to be broken.
At the recent Hacking at Random (HAR) conference, held from 13-16 August, Karsten Nohl detailed plans for cracking standard GSM cell phone encryption, known as A5/1, and making the results available for anyone to use. You can see a PDF of his presentation here.
This issue was covered by Steve Gibson and Leo Laporte in the latest episode of the podcast Security Now, transcript here.