Electronic interception appeared as early as 1900, during the Boer War of 1899-1902. The British Royal Navy had installed wireless sets produced by Marconi on board their ships in the late 1890s and the British Army used some limited wireless signalling. The Boers captured some wireless sets and used them to make vital transmissions. Since the British were the only people transmitting at the time, no special interpretation of the signals that were intercepted by the British was necessary.
The birth of signals intelligence in a modern sense dates from the Russo-Japanese War of 1904-1905. As the Russian fleet prepared for conflict with Japan in 1904, the British ship HMS Diana stationed in the Suez Canal intercepted Russian naval wireless signals being sent out for the mobilization of the fleet, for the first time in history.
Development in World War I
Over the course of the First World War, the new method of signals intelligence reached maturity. Failure to properly protect its communications fatally compromised the Russian Army in its advance early in World War I and led to their disastrous defeat by the Germans under Ludendorff and Hindenburg at the Battle of Tannenberg. In 1918, French intercept personnel captured a message written in the new ADFGVX cipher, which was cryptanalyzed by Georges Painvin. This gave the Allies advance warning of the German 1918 Spring offensive.
The British in particular built up great expertise in the newly emerging field of signals intelligence and codebreaking. On the declaration of war, Britain cut all German undersea cables. This forced the Germans to use either a telegraph line that connected through the British network and could be tapped, or through radio which the British could then intercept. Rear-Admiral Henry Oliver appointed Sir Alfred Ewing to establish an interception and decryption service at the Admiralty; Room 40. An interception service known as 'Y' service, together with the post office and Marconi stations grew rapidly to the point where the British could intercept almost all official German messages.
The German fleet was in the habit each day of wirelessing the exact position of each ship and giving regular position reports when at sea. It was possible to build up a precise picture of the normal operation of the High Seas Fleet, to infer from the routes they chose where defensive minefields had been placed and where it was safe for ships to operate. Whenever a change to the normal pattern was seen, it immediately signalled that some operation was about to take place and a warning could be given. Detailed information about submarine movements was also available.
The use of radio receiving equipment to pinpoint the location of the transmitter was also developed during the war. Captain H.J. Round working for Marconi, began carrying out experiments with direction finding radio equipment for the army in France in 1915. By May 1915, the Admiralty was able to track German submarines crossing the North Sea. Some of these stations also acted as 'Y' stations to collect German messages, but a new section was created within Room 40 to plot the positions of ships from the directional reports.
Room 40 played an important role in several naval engagements during the war, notably in detecting major German sorties into the North Sea. The battle of Dogger Bank was won in no small part due to the intercepts that allowed the Navy to position its ships in the right place. It played a vital role in subsequent naval clashes, including at the Battle of Jutland as the British fleet was sent out to intercept them. The direction-finding capability allowed for the tracking and location of German ships, submarines and Zeppelins. The system was so successful, that by the end of the war over 80 million words, comprising the totality of German wireless transmission over the course of the war had been intercepted by the operators of the Y-stations and decrypted. However its most astonishing success was in decrypting the Zimmermann Telegram, a telegram from the German Foreign Office sent via Washington to its ambassador Heinrich von Eckardt in Mexico.
With the importance of interception and decryption firmly established by the wartime experience, countries established permanent agencies dedicated to this task in the interwar period. In 1919, the British Cabinet's Secret Service Committee, chaired by Lord Curzon, recommended that a peace-time codebreaking agency should be created. The Government Code and Cypher School (GC&CS) was the first peace-time codebreaking agency, with a public function "to advise as to the security of codes and cyphers used by all Government departments and to assist in their provision", but also with a secret directive to "study the methods of cypher communications used by foreign powers". GC&CS officially formed on 1 November 1919, and produced its first decrypt on 19 October. By 1940, GC&CS was working on the diplomatic codes and ciphers of 26 countries, tackling over 150 diplomatic cryptosystems.
The US Cipher Bureau was established in 1919 and achieved some success at the Washington Naval Conference in 1921, through cryptanalysis by Herbert Yardley. Secretary of War Henry L. Stimson closed the US Cipher Bureau in 1929 with the words "Gentlemen do not read each other's mail."
World War II
A Mark 2 Colossus computer
. The ten Colossi were the world's first programmable electronic computers, and were built to break the German codes.
The use of SIGINT had even greater implications during World War II. The combined effort of intercepts and cryptanalysis for the whole of the British forces in World War II came under the code name "Ultra" managed from Government Code and Cypher School at Bletchley Park. Properly used, the German Enigma and Lorenz ciphers should have been virtually unbreakable, but flaws in German cryptographic procedures, and poor discipline among the personnel carrying them out, created vulnerabilities which made Bletchley's attacks feasible.
Bletchley's work was essential to defeating the U-boats in the Battle of the Atlantic, and to the British naval victories in the Battle of Cape Matapan and the Battle of North Cape. In 1941, Ultra exerted a powerful effect on the North African desert campaign against German forces under General Erwin Rommel. General Sir Claude Auchinleck wrote that were it not for Ultra, "Rommel would have certainly got through to Cairo". "Ultra" decrypts featured prominently in the story of Operation SALAM, László Almásy's mission across the desert behind Allied lines in 1942. Prior to the Normandy landings on D-Day in June 1944, the Allies knew the locations of all but two of Germany's fifty-eight Western-front divisions.
Winston Churchill was reported to have told King George VI: "It is thanks to the secret weapon of General Menzies, put into use on all the fronts, that we won the war!" Supreme Allied Commander, Dwight D. Eisenhower, at the end of the war, described Ultra as having been "decisive" to Allied victory. Official historian of British Intelligence in World War II Sir Harry Hinsley, argued that Ultra shortened the war "by not less than two years and probably by four years"; and that, in the absence of Ultra, it is uncertain how the war would have ended.