Recently, the development of telecommunication fields is growing rapidly. One of the important issues in the development of telecommunications is the expansion of public mobile network infrastructures, i.e., base stations. However, the development of base stations requires substantial funds. Currently, there is a solution in building base station infrastructure with more efficient and cheaper by using Software Defined Radio (SDR) and Universal Software Radio Peripheral (USRP). USRP is working as a base station and SDR as a software complement in the development of the system. In this paper, we propose a GSM 2.5G network system. We utilize several software such as soft-switch, GNU radio and OpenBTS to support Mobile Switching Center (MSC), Base Station Controller (BSC), and Base Transceiver Station (BTS) functionalities. We demonstrate handover mechanism between two and more base stations, and authentication mechanism in the system. We also measure the throughput of the system provided by General Packet Radio Service (GPRS). The system capacity provides in average of 4 Kbps for download and 3 Kbps for upload. The main factor that affects the throughput is the factor of multi slot channel allocations towards download and upload. We also demonstrate handover mechanism when MS moves away from USRP 1 towards USRP 2, signal level of USRP 1 received by MS is weaker than signal level of USRP 2. Thus, MS selects USRP which has a strong signal as its base station. In addition, to prevent hacking and provide user authentication on the system, user and MSC must have a same key of Ki. By using a secret key of Ki which owned GSM network, only users that have the same key of Ki can be registered on the system.