With UMTS, the cell phone again went down the I'll-roll-my-own-damn-encryption route, and used a new block cipher called KASUMI. It's more secure that the utterly broken plain GSM system, but it's still suspect: KASUMI has a 64-bit block size and takes 128-bit keys (which other modern ciphers have 128-bit blocks and use keys that start at 128 bits). There already has attacks against the cipher, though these attacks aren't yet practical.
When designing a cryptosystem, just use the standards; go with AES and other time-tested algorithms. It's very easy to get cryptography subtly and catastrophically wrong.
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