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The ETSI proposed S-UMTS system is intended to provide an important overlay to terrestrial 3rd generation networks. S-UMTS is specifically targeted at providing services in remote regions, or potentially just as important, when out of coverage of the subscriber's home network or a network with a suitable roaming agreement. Thus, satellite/terrestrial interoperability is a key issue to enable subscribers the quality and diversity of service offered by terrestrial systems plus the broad coverage offered by satellite systems. The paper describes the considerable technical challenges to be addressed to achieve full satellite system interoperability with 2.5G and 3G networks, and outlines solutions and the necessary steps to meet the service and end user requirements.