The base station subsystem (BSS) is the section of a traditional cellular telephone network which is responsible for handling traffic and signaling between a mobile phone and the network switching subsystem. The BSS carries out transcoding of speech channels, allocation of radio channels to mobile phones, paging, quality management of transmission and reception over the air interface and many other tasks related to the radio network. The base transceiver station, or BTS, contains the equipment for transmitting and receiving radio signals (transceivers), antennas, and equipment for encrypting and decrypting communications with the base station controller (BSC).

Typically a BTS for anything other than a picocell will have several transceivers (TRXs) which allow it to serve several different frequencies and different sectors of the cell (in the case of sectorised base stations). A BTS is controlled by a parent BSC via the base station control function (BCF).The BCF is implemented as a discrete unit or even incorporated in a TRX in compact base stations. The BCF provides an operations and maintenance (O&M) connection to the network management system (NMS), and manages operational states of each TRX, as well as software handling and alarm collection.

The functions of a BTS vary depending on the cellular technology used and the cellular telephone provider. There are vendors in which the BTS is a plain transceiver which receives information from the MS (mobile station) through the Um (air interface) and then converts it to a TDM ("PCM") based interface, the Abis interface, and sends it towards the BSC. There are vendors which build their BTSs so the information is preprocessed, target cell lists are generated and even intracell handover (HO) can be fully handled.

The advantage in this case is less load on the expensive Abis interface. The BTSs are equipped with radios that are able to modulate layer 1 of interface Um; for GSM 2G+ the modulation type is GMSK, while for EDGE-enabled networks it is GMSK and 8-PSK.

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