A GSM system consists essentially of three parts - namely, the Base Station Subsystem (BSS), the Network and Switching Subsystem (NSS), and the Operation Support System (OSS).

a) Base Station Subsystem (BSS):

The BSS consists of many Base station controllers (BSCs) which connect to a single Main Switching center MSC, and each BSC typically controls up to several hundred Base Transceiver Stations (BTSs). Some of the BTSs maybe co-located at the BSC, and others may be remotely distributed and physically connected to the BSC by microwave link or dedicated leased lines. BTS consists of transceiver units and it's functions are as follows:

• Encodes, encrypts ,multiplexes, modulates and feeds the RF signals to the antenna.
• Communicates with Mobile station and BSC

Functions of BSC are as follows:

• Manages Radio resources for BTS
• Assigns Frequency and time slots for all MS’s in its area
• Handles call set up
• Transcoding and rate adaptation functionality
• Handover for each MS
• Radio Power control
• Communicates with MSC and BTS

Mobile handoffs (called handovers, or HO, in the GSM specification) between two BTSs under the control of the same BSC are handled by the BSC, and not the MSC. This greatly reduces the switching burden of the MSC. The BSCs are physically connected via dedicated leased lines or microwave link to the MSC. The BSS is connected with the NSS with an A interface.

Interface: Any wireless device communicates with the other wireless device using a set of protocols. The way the two entities communicate is called as an interface.

In GSM various interfaces are defined, they are as follows:

i) $U_m$ interface: It is the air interface that connects MS to BSS. All the air specifications e.g: modulation, multiple access type, Time slot structure etc. are defined in this interface.

ii) Abis interface: It is the interface which connects a BTS to a BSC. It carries traffic and maintenance data, and is specified by GSM to be standardized for all manufacturers. In practice, however, the Abis for each GSM base station manufacturer has subtle differences (Abis interface is not totally standardized), thereby forcing service providers to use the same manufacturer for the BTS and BSC equipment.

iii) A interface: The interface between a BSC and a MSC is called the A interface,which is standardized within GSM. The A interface uses an SS7 protocol called the Signaling Correction Control Part (SCCP) which supports communication between the MSC and the EIR, as well as network messages between the individual subscribers and the MSC. The A interface allows a service provider to use Base Stations and switching equipment made by different manufacturers.

b) The Network Switching Sub-system (The NSS):

The NSS handles the switching of GSM calls between external networks and the BSCs in the radio subsystem and is also responsible for managing and providing external access to several customer databases. The MSC is the central unit in the NSS and controls the traffic among all of the BSCs. In the NSS, there are three different databases called the Home Location Register (HLR), Visitor Location Register (VLR), and the Authentication Center (AuC).

• The HLR is a database which contains subscriber information and location information for each user who resides in the same city as the MSC. Each subscriber in a particular GSM market is assigned a unique International Mobile Subscriber Identity(IMSI), and this number is used to identify each home user.
• The VLR is a database which temporarily stores the IMSI and customer information for each roaming subscriber who is visiting the coverage area of a particular MSC. The VLR is linked between several adjoining MSCs in a particular market or geographic region and contains subscription information of every visiting user in the area. Once a roaming mobile is logged in the VLR, the MSC sends the necessary information to the visiting subscriber's FILE so that calls to the roaming mobile can be appropriately routed over the PSTN by the roaming user's MSC.
• The Authentication Center is a strongly protected database which handles the authentication and encryption keys for every single subscriber in the HLR and VLR. The Authentication Center contains a register called the Equipment Identity Register (EIR) which identifies stolen or fraudulently altered phones that transmit identity data that does not match with information contained in either the HLR or VLR.

c) The Operating Sub-System:

The OSS is responsible for organization of the network and operational maintenance. More specifically,the OSS mainly covers the following functions:

1. Accounting: This unit accounts for the total call costs of the subscribers in the area.
2. Maintenance: The full functionality of each component of the GSM network has to be maintained all the time. Malfunctions may either occur in the hardware or in the software components of the system. Hardware malfunctions are more costly, as they require a technician to drive to the location of the malfunction. In contrast, software is nowadays administrated from a centre allocation. For example, new versions of switching software can be installed in the complete BSS from a central location, and activated all over the network at a specific time. Revision and maintenance software often constitutes a considerable part of the overall complexity of GSM control software.
3. MS management: Even though all MSs have to pass a type approval, it may happen that some devices, which cause , are operating in the network. Such devices have to be identified and their further activities have to be blocked.
4. Data collection: The OSS collects data about the amount of traffic, as well as the quality of the links.

The end user will have a mobile station which has two parts, namely:

• Mobile Equipment (ME): It is a portable, vehicle mounted, hand held device. It is uniquely identified by an IMEI (International Mobile Equipment Identity).
• Subscriber Identity Module (SIM): One of the most remarkable features of GSM is the Subscriber Identity Module (SIM), which is a memory device that stores information such as the subscriber's identification number, the networks and countries where the subscriber is entitled to service, privacy keys, and other user-specific information. A subscriber uses the SIM with a 4-digit personal ID number to activate service from any GSM phone. Without a SIM installed, all GSM mobiles are identical and nonoperational. It is the SIM that gives GSM subscriber units their identity. The SIM is uniquely identified by an International Mobile Subscriber Identity number (IMSI).

Subscribers may plug their SIM into any suitable terminal - such as a hotel phone, public phone, or any portable or mobile phone - and are then able to have all incoming GSM calls routed to that terminal and have all outgoing calls billed to their home phone, no matter where they are in the world.