"The British were not very interested in having a strong encryption [in GSM]. And after a few years, they protested against the high security level that was proposed. They wanted a key length of 48 bit. We were very surprised. The West Germans protested because they wanted a stronger encryption to prevent spying from East Germany. The compromise was a key length of 64 bit – where the ten last bits were set to zero. The result was an effective key length of 54 bit. Among other things they wanted to make sure that a specified Asian country should not have the opportunity to escape surveillance. Leif Nilsen, a Norwegian cryptography expert, confirms to Aftenposten that it would have been technically possible to have an encryption of 128 bit in the GSM network from the start. One other thing that was put in the GSM specification, after demands from some countries, was that the encryption could be turned off, without the cell phone user knowing."

http://www.aftenposten.no/nyheter/uriks/Sources-We-were-pressured-to-weaken-the-mobile-security-in-the-80s-7413285.html