A5/3 (Kasumi) is near-on identical to the cyphers used in 3G connections, but you're right, this is the 2G only implementation; so yes, this only affects (applies to) 2G/EDGE/GSM.
I'm absolutely bloody agog that commercial first-world operators have taken until the end of 2014 to actually support this -I think it was ratified into the specification around 2001 if not earlier.
Also, for all you tinfoil wearers out there, you might like the fact that the original specification for A5/3 was altered to make it more hardware friendly. In 2010 it was realized that this actually made it extremely easy [1] to recover the session key (if not in real time) [2].
Integrating support for these algorithms on the device side ends up being a high hurdle. Doing anything at scale is inevitably harder than you expect it to be. If it was a simple change, people would make it.
You're mistaken - 3G/UMTS supports circuit-switched voice calls just fine. It's 4G/LTE that hasn't supported voice calls until very recently when the first networks deployed VoLTE.
The only time I’ve been on 2G with AT&T in the last few years was going through the BART tunnel in South Bay… haha.