The smart grid will be a power grid more “aware” of its operating state and having the ability to self-heal. These features may be incorporated into the grid by implementing a phasor measurement units based wide area measurement system. Such a system will help in better real time monitoring and control of the grid. However, the wide area measurement system is subject to challenges with respect to its security. In this paper, a comprehensive analysis of security issues with a wide area measurement system is presented and the research efforts required to be taken are identified. Moreover, the effect of communication failure on a PMU installed system has been presented using integer linear programming.