Mobile and Security News

In mobile-related news, AT&T Inc.. announced that it would acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock deal valued at approximately $39 billion. Meanwhile, in security-related news, federal cyber incidents rose 39 percent in 2010, according to a new report. Additionally, EMC Corp. reported that its RSA security division had been hacked, potentially threatening highly sensitive computer systems.

Focal Points:

• AT&T has agreed to pay Deutsche Telekom $39 billion for T-Mobile, of which $25 billion will be in cash and the rest will be paid in common stock. The deal will give Deutsche Telekom a roughly eight percent stake in AT&T and a spot on its board of directors, said the two wireless providers. AT&T has also reserved the right to raise the cash portion of the deal by up to $4.2 billion, if Deutsche Telekom receives at least a five percent equity ownership interest in AT&T, the companies added. The agreement has been approved by the boards of both companies. AT&T operates the largest wireless network in the U.S. with 95.5 million subscribers, while T-Mobile runs the fourth largest wireless network with 23 million subscribers. The deal would allow AT&T to add about 34 million customers, enabling AT&T to surpass Verizon Wireless in the number of subscribers. Both AT&T and T-Mobile run networks based on Global System for Mobile Communication (GSM), and the merger would leave the U.S. with only one GSM provider. T-Mobile offers High Speed Packet Access (HSPA) + technology, but has yet to commit to a true 4G (fourth generation) network. In announcing the deal, AT&T said that it intends to extend its planned 4G Long-Term Evolution (LTE) network to T-Mobile subscribers. Though regulatory approval may take a year, cost savings and revenue gains could total $3 billion a year, AT&T added.
• According to a new report from the U.S. Office of Management and Budget (OMB), cyber incidents affecting government systems rose 39 percent in 2010 to 41,776. The annual report also revealed that phishing represented more than half of the 107,439 cyber incidents compiled by the United States Computer Emergency Readiness Team (US-CERT) for 2010. US-CERT obtains its information from American citizens, commercial enterprises, federal, state, and local governments, and foreign CERT teams. US-CERT found that 39 percent of the incidents came from the federal government, and that more than 27 percent of these incidents were categorized as under investigation or other. The OMB report also discovered that among federal agencies, 31 percent of cyber incidents in 2010 involved malicious code. Scans, probes, and attempted access represented 27 percent of incidents, and improper usage accounted for 17 percent. Moreover, the report noted that phishing accounted for 53 percent of the incidents and virus/Trojan/worm/logic bombs were the next most prevalent at 10 percent of the attacks. Malicious Web site and non-cyber incidents accounted for seven percent each while policy violations occurred six percent of the time. Equipment theft/loss, suspicious network activity, attempted access and social engineering rounded out the list.
• EMC said in a filing with the Securities and Exchange Commission (SEC) that its RSA security division was hacked. The scope of the attack is not yet known, but the potential fallout could be widespread, according to the company. EMC did not offer clues about the suspected origin of the attack, but stated that the infiltrators had made off with confidential data on RSA's SecurID products. The company's executive chairman said that EMC is confident that no other products were impacted by this attack. Moreover, the vendor believes that neither customer- nor employee-identifiable information was compromised in the breach. RSA's customers include governments, health insurance outfits, the military, various banks and medical facilities, as well as EMC itself, per the company's Web site.

Experton Group believes a merger, if approved, between AT&T and t-Mobile will change the wireless landscape in the U.S. and force additional consolidation. If the government does approve the merger, users can expect to see the regulators push for some divestitures. T-Mobile customers will also be forced to switch devices and give up certain capabilities should the deal go through. Cyber threats continue to grow unabated and the RSA incident demonstrates how aggressive hackers can be. The fact that RSA is unwilling to provide users with details so that they can understand the nature and extent of the threat is disturbing and may foreshadow more problems ahead for banks, governments, the military and others. IT executives using SecurID should follow the advice provided by RSA and evaluate additional steps to ensure the risk of being breached is minimized. Moreover, executives should now be prepared to defend against attacks may come from well-funded groups, such as foreign governments that may be considered hostile.