The document discusses corporate demand for secure voice encryption products. A market research study was conducted through phone surveys with 40 senior managers across industries. Key findings include: - Corporates are largely unaware of voice encryption products despite expressed concerns about confidential calls being monitored. - There is significant demand to encrypt voice, data, and faxes, especially for business calls. - Encrypted GSM phones and desktop phones would likely be used daily by most respondents. Encrypted faxes would be used less frequently. - Ease of use, availability, functionality, and price are important factors that would influence purchase decisions for secure communication products.

1. The Market

2. The ProblemThe need for voice encryption is well known in the Government and MilitaryThere is a latent demand in the Corporate and private sector to protect calls over the public network against interceptionThis latent demand is being encouraged by reports in the Press of industrial espionage and reports of prominent figures being embarrassed by interception of their mobile callsEisfor products encrypt telephone calls over public networks end-to-end so that any intercepted call cannot be understood

3. Press ReportsVodafone fined £53m over Greek phone tapping affairVodafone was last night ordered to pay an unprecedented €76m (£53m) in fines for its role in an espionage scandal that saw the mobile phones of Greece's political, business and military elite being tapped in the run-up to and after the 2004 Olympic Games in Athens.Observer (London) December 15 2006Italy arrests 12 more in T.Italia wiretap caseMILAN, March 22 (Reuters) - Italian authorities have arrested 12 more people in connection with an investigation into illegal wiretapping by Telecom Italia staff and others, judicial sources told Reuters on Thursday. The investigation began last year, and in September magistrates arrested several people including Telecom Italia's former head of security, GiulianoTavaroli. Reuters March 22 2007Role of Telecom Firms in Wiretaps Is Confirmed WASHINGTON, Aug. 23 — The Bush administration has confirmed for the first time that American telecommunications companies played a crucial role in the National Security Agency’s domestic eavesdropping program after asserting for more than a year that any role played by them was a “state secret.”New York Times August 24 2007Three quizzed over royal phone tap claimsFormer royal aide Dickie Arbiter said there was considerable sensitivity within the royal family over phone interceptions following the infamous “squidgy-gate” episode in the 1990s.He told Sky News: “If you cast your mind back there were several phone tappings, mainly of mobiles.“This goes a stage further and if this is phone tapping landlines then this is a very serious offence.“There is a lot of sensitivity after these incidents with mobile telephones.Observer (London) Ausust 8 2006

4. Enhanced GSM SecurityThe GSM network introduced a significantly higher level of security than previously existed in the older analogue cellular systems. The GSM network can provide a secure encryption facility only on the air interface between the mobile handset (ME) and the base-station (BTS). This encryption is switched on at the network operator’s discretion.BSCPPSTN,ISDN, PSPDNCSPDNBTSBSCMSCBTSUmAbisABase Station Subsystem Network SubsystemBTS Base Transceiver StationBSC Base Station ControllerMSC Mobile Switching CentreEncrypted communicationsHowever, the high level of privacy in the GSM network does not extend in the other public telecommunication networks that may be used to carry a call. User data (voice, data or fax), passes completely unencrypted through the non-GSM network portion of a call.

5. Even if the GSM encryption is switched on…….GSM phone encryption "can be cracked“The encryption system that protects the almost 900 million users of GSM cell phones from instant eavesdropping or fraud is no longer impregnable, cryptologists claim.Researchers at the Technion-Israel Institute of Technology in Haifa say they have found a way to defeat the security system, exploiting a flaw in the way the encryption is applied.With GSM, the voice is encoded digitally. But, before this data is encrypted, it is corrected to help compensate for any interference or noise, says Eli Biham, who led the Technion team. This gives an opportunity for a "man in the middle" attack, in which the call is intercepted between the handset and the network base station.New Scientist September 4 2003Interception equipment is readily available for all algorithms used within GSM,Thuraya and VOIP.

6. The solutionBSCBSCBTSBTSBSCBSCMSCBTSBTSEncrypted communicationsPSTNVoIPOur products provide customers who are looking for the highest level of privacy with the additional protection of safeguarding their conversations over the entire network including the non-GSM portion. User conversationwill be encrypted on a peer-to-peer level, that is, encryption will occur in the calling party handset, and decryption will occur only at the called party’s handset.

7. What do we know about the corporate market for secure voice productsExpressed need for secure voiceWhy haven’t Corporates already bought?Do not know where to buy these products

8. Did not know that they existed

9. Not advertised to my knowledge

10. Lack of availability

11. Where to buy, I do not want to go to a “spy” shop

12. Is it legal to use

13. Gives me bad “vibrations” , like FBI and CIA

14. Telenor did not buy us one, so they probably do not think to much about these issues

15. Until clients ask for usage of this, we will not buy it. (E&Y lawyer)

16. Encrypted GSM:

17. Daily: 85%

18. Weekly: 12.5%

19. Monthly: 2.5%

20. Encrypted Desktop:

21. Daily: 77.5%

22. Weekly: 22.5%

23. Monthly: 0%

24. Encrypted Fax:

25. Daily: 10%

26. Weekly: 50%

27. Monthly: 25%

28. Not use at all: 15%Strong acceptance of the needDon’t know how to fulfilBUTSource: Eisfor Market Research

29. Corporate Market Requirements+High PerformanceModerate PricesSource: Eisfor Market Research

30. Market PositioningTraditionalSuppliersHighGovt/MilitarySegmentCorporateSegmentPriceModerateEisforNewGenerationSuppliersLowHighModerateLowPerformance

31. Initial primary marketing researchEisfor Ltd

32. Purpose To gain better knowledge of corporate market for voice encryption products, in terms of: - current awareness in the corporate sector about voice encryption products - probable usage of the products - expressed need for encryption - pricing preferences

33. MethodologyMethodologyTelephone survey: Called 40 senior managers in different industries living in 12 EFTA countriesDuration: approx. 30 minStructured questions: Asked all persons the same 15 questions

34. Methodology (continued)Management of responses: Some of the question were unprompted, but most of them were prompted.Description of respondents: All the persons interviewed are employed in middle/senior management positions

35. ConclusionCorporate market largely unaware of voice encryption productsThere is a sizeable demand for voice encryptionGreatest demand is to encrypt Voice and data

36. Research questions and indicative responses

37. When you think about confidential call, what are your concerns?Who are listening to us and what will they use the information forI need secure communicationIs it safe to use GSM or fixed phone for confidential conversationNeed to be very carefulDifficult to do business when you are never sure if someone is listening to youWhat to say and not to sayIs it to day possible to make a secure conversation over GSM/Fixed lineIs anybody listening to us?People have eavesdropping as a profession. It is big businessHow can I make my call secure?

38. I’d like you to think about a confidential phone call that you have made recently. Describe your thoughts and emotions.Before:Do not think to much about it.Who needs this information that I am in a process of communicating?Concerned that the message goes through in the manner that I wantLess concerned now than beforeNo secure phone today, so what can I do?I always plan my phone calls in advance, what to say and not to sayIt is a part of my daily businessI need to be very careful, not mention names and numbersI stand in places where nobody can hear what I am saying