From the Archives, 1993: Mobile phone network launches despite security objections

First published in The Sydney Morning Herald, April 28, 1993

CANBERRA: The Federal Government has overridden the objections of law enforcement agencies and allowed Telecom and Optus to start new digital mobile phone networks which are so secure that conversations can escape officially authorised telephone bugging.

Telecom marketing manager Michael Nugent with mobile phone on March 10, 1993.Credit: Adam Smith

While law enforcement agencies can still intercept calls from a mobile phone to an ordinary phone, calls from one digital mobile phone to another cannot be tapped.

The Government agreed to waive the bugging requirement, originally a condition of Telecom and Optus’s mobile phone network licences, late last week after strong pressure from both carriers to begin their services without providing technology to allow law enforcement agencies to listen into conversations.

The changes to the system to allow official bugging will take up to two years to complete and will cost more than $25 million, a cost which the Government has agreed to bear.

Telecom cellular phone aerials, 1993Credit: Fairfax Archives

The Government’s waiving of the bugging requirement was made despite strong opposition from law enforcement agencies, who wanted the start of the new digital mobile phone networks delayed until there was technology available to allow conversations conducted on these networks to be intercepted.

The law enforcement agencies argued that once criminals and others who had reason to avoid officially authorised interceptions of their telephone conversations became aware of the loopholes in the new system, they would exploit it.

The exemption was given by the Minister for Communications, Mr Beddall, after talks held last week with the acting Attorney-General, Mr Kerr.

It enabled Telecom to launch the country’s first digital mobile phone network yesterday.

The Federal Government was reticent about the decision to let the new network go ahead.

A spokesman would say only that the Attorney-General was “satisfied” with the operational aspects of the new system.

The general manager of Telecom MobileNet, Mr John Dearn, refused to confirm or deny that calls made from the new GSM (General System Mobile) phones to other GSM phones could not be intercepted, or that an exemption had been sought from the Government to allow the new GSM service to begin.

“We have an agreement with the Department of Communications that we will not discuss the licence conditions,” he said.

An ad for Telecom’s Talkabout mobile service.

Referring to the fact that most mobile phone calls are to fixed phones attached to the ordinary telephone network, Optus’s chief operating officer, Mr Ian Boatman, said that most calls carried on Optus’s GSM network would be interceptable by the security agencies.

A third licensed operator, Vodaphone, is not likely to begin its service until late this year.

The three mobile licensees are required by their licences to introduce the new digital mobile system, or GSM, as soon as the standard is available.

However, it became clear that the formula used to encode the new service, known as the A5 algorithm, was so secure that not even the police or security agencies could listen in.

The dilemma for the Government was that having insisted on the early introduction of GSM, it faced the prospect of substantial delays if it did not waive the licence condition. Because the standard was so secure, nobody anticipated the difficulty of re- coding and re-encrypting the algorithm to give access to law enforcement agencies.

The Telecom system, costing in excess of $100 million to establish, covers more than 55 per cent of Australian consumers in Sydney, Melbourne, Canberra, Brisbane, Perth, Adelaide, the Gold Coast, Newcastle, Geelong and on the Mornington Peninsula, Victoria.