This work was aimed at developing a low cost/low power rural GSM telephone system. It focused on the development of a transceiver system which is designed to extend the coverage of the base transceiver stations (BTS) to the rural community by creating cells in those communities. The transceiver was designed to be bidirectional, regenerative and transparent to both the mobile units in the rural areas and the BTS. The transceiver parameters were derived using Excel spreadsheets and optimized using a Matlab program developed for the purpose. A novel transceiver architecture based on the superheterodyne topology was simulated using the Genesys simulation software.