Phase 1 supports:
- TCP/IP and X.25 bearer services. 
- GPRS identities 
- GPRS security, using a new encryption algorithm especially tailored for packet data 
- Operator Call Barring and Termination, Operator Call Screening 
- Support of SMS over GPRS 
- Support for packet charging 

Phase 2 GPRS:

Phase 2 of GPRS completes the capabilities to meet GPRS requirements. It will add support for additional specific point-to-point and point-to-multipoint services, for applications such as traffic telematics and train control. Support for alternative user and network interfaces, e.g. ISDN and other packet networks, as well as support for additional supplementary services, will also be added.

The implementation of GPRS requires also some additional nodes and changes to the now being network structure. The main structure of the GPRS network architecture implemented on a existing GSM network is pictured in the following figure.

Figure 2. - GPRS network structure

For more detailed information of the functions and technical features of each node see the following links:
ETSI - European Telecommunications Standards Institute
Uudet Datapalvelut GSM verkossa