AMSTERDAM: A German company launched a new mobile handset on Tuesday, targeted at business executives, that secures lines from eavesdroppers, sparking criticism that it could also make criminals harder to catch.

Berlin-based Cryptophone, a unit of privately held GSMK, developed the phone by inserting an encryption software inside a standard handheld computer phone. This ensures that calls can only be decoded by a similar handset or a computer running the software.

But the phone is seen as a mixed blessing in some European countries.

While the benefits for business managers exchanging sensitive information are obvious, such a device could potentially have the side effect of helping criminals.

Security and Computer forensic specialists in the Netherlands said the device could threaten criminal investigation by the Dutch police, which is one of the world’s most active phone tappers, listening in to 12,000 phone numbers every year.

But privacy lobbyists say the new handset is a “freedom phone” much more than a “terror phone.”

“It’s a tremendous step forward, because the level of surveillance by authorities is breathtaking,” said Simon Davies, director of Privacy International in Britain.

Cryptophone says unlike rivals such as Sweden’s Sectra, Swiss Crypto AG and Germany’s Rohde & Schwarz, it has no ties to national security and Defense Organizations and that there is no backdoor for government agencies.

“We allow everyone to check the security for themselves, because we’re the only ones who publish the source code,”

said Rop Gonggrijp at Amsterdam-based NAH6.

Gonggrijp, who helped develop the software, owns a stake in Germany’s GSMK.

The Microsoft-based XDA handheld computer phone made by Taiwan’s High Tech Computer is selling for 3,499 euros per two handsets.

At that price it is targeting executives, lawyers and bankers who regularly swap market sensitive information on mergers and lawsuits, and for whom privacy is worth paying for.

Eavesdropping equipment, available for around 100,000 euros, is officially only available to government agencies, but suspected criminals have also been able to obtain it, Gonggrijp said.

The strong encryption standards used by Cryptophone can already be applied in e-mail and other computer and network monitoring applications. The advent of more powerful handheld devices such as the Microsoft-based handheld computer phones has allowed Cryptophone to offer the same level of security on mobile phones. Local Server Network protocols are used as well in this industry to further sniff protocols and monitor them via SNMP and WMI.

Its a well known fact that the information industry is full of computer and network protocols, including TFTP Servers and SFTP Servers, that have been known to be vulernable to eavesdropping in the past.

But the high price of the device means few will be able to buy it.

“Not many average consumers will pay that kind of money. The people who will be using it are in businesses,” said Ian Brown, director of the Foundation for Information Policy Research in Britain.

If the high security phones become popular, however, governments could well clamp down on them, Privacy International’s Davies said. “I would not trust governments to leave it alone.”

Cryptophone says on its website (www.cryptophone.de) that exports of the device were unlimited within Europe and to several large economies around the world, but that customer credentials would be checked for a criminal records. — Reuters