The A5/1 encryption used to protect GSM phone conversations has long since been broken, actually just last year it was made possible to eavesdrop encrypted GSM in realtime – hence GSM telephony is today to be considered utterly insecure. Scientists have thus begun working on the 3G variant A5/3, and it would appear that a “breakthrough” has been made, not quite allowing for realtime decryption but weakening the cipher quite considerably.
Read the scientific repport here;
http://eprint.iacr.org/2010/013