In this paper, modifications in the original KASUMI block cipher is proposed by introducing a finite-state machine (FSM) and substitution box (S- box) to provide better confidentiality and integrity function in global system for mobile communications (GSM) and 3G networks. The FSM constitute the nonlinear combiner of SNOW 3G block cipher and it uses two S-box to provide strong diffusion. The addition of FSM in KASUMI is introducing the non-linearity in output bits and it will increase the complexity for an attacker to make an attack. Also, few changes are made in a KI and KL keys that are used in a different rounds of KASUMI to prevent various attacks such as a rectangle attack, sandwich attack, single key attack, etc. The simulation results show the performance improvement of the proposed modified KASUMI design is compared with the conventional KASUMI in terms both the encryption speed and encryption time taken.