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Frequency hopping serves three major purpose in GSM

"  Frequency Hopping  rule is simple,  that our conversation must remain on the same physical channel and time slot for the entire time we are on a particular site. If the network were able to move us from slot to slot, and from frequency to frequency, then we could randomize the effects of interference "
Here below i would discuss how Frequecy hopping fights all the three major disadvantage specifed above.
As we know GSM uses physical channels, but each of those channels is divided into 8 time slots. One user consumes one slot, thus allowing 8 users to be on a GSM channel simultaneously. Each GSM channel is 200 kHz wide, thus giving a 30 MHz license-holder a grand total of 75 physicals channels within their spectrum allotment.
Obviously 75 channels isn’t enough to spread evenly among the 200 some odd cell sites around the GTA, each of which has 3 independent sectors. A sector is an area covering 120 degrees around the site. That’s a grand total of 600 sectors and only 75 channels. Obviously the idea is to reuse channels in multiple sites, and to keep those co-channels far enough apart that they don’t interfere with one another.
Next The most common type of interference suffered by a dense GSM network is therefore co-channel inference. This means that your phone call is interfered with by another site operating on the same physical channel and time slot. Unlike analog, where co-channel interference would often result in you actually hearing the other conversation, that never happens in GSM.
Another problem facing narrowband radio systems is multipath. This happens when large objects such as buildings reflect your desired signal. The reflection can sometimes be just as strong as the direct signal, and the two can interfere with one another.
Consider co-channel interference. Not all of the slots are in use on all of the physical channels on each site where they are reused, so although slot 4 on channel 522 might be clobbered by another conversation, slot 7 on channel 530 probably isn’t. So, if we can take each caller on a particular sector and jump them from slot to slot, and from frequency to frequency, then each user runs a far lower risk of suffering from co-channel interference. And when such interference does occur, chances are good that the error correction algorithms can take care of it.
You know that the number of frequencies for GSM is 124 and it is not much. The range is divided for some operators. What happen when the sites configuration is high? They do not have enough frequencies. One way, they expand their range to use CDS 1800. So, they have to spend more money. 
There are two types of frequency hopping: Baseband and Syntherizer
The main technique for frequency hopping is that 1 carrier atleast uses more than one predefined frequecy to serve their purpose.
In Baseband hopping, the transmitter will change its frequency on frame basis. 
All TRX can hop, but the list of frequencies is limited to the number of TRX in the cell. For instance, if you have 4 TRX, the amount of frequencies will be 4. It uses a round robin mechanism, for each TDMA frame, one of those four frequencies are used in round robin pattern.
In syntherizer hopping, the transmitter will change its frequency on time slot basis. That is why they also said it is fast hopping. 
All TRX except BCCH TRX will hop over a list of frequencies (= frequency hopping sequence). You can put as many frequencies as you want in the list (up to more than 30 usually).
Only the BCCH TRX requires a fixed frequency (bcch frequency that shouldn't be included in the FHS !).
The frequency hopping sequences are orthogonal inside one cell (i.e. no collisions occur between communications of the same cell), and independent from one cell to an homologue cell (i.e. using the same set of RF channels, or cell allocation). 
The hopping sequence is derived by the mobile from parameters broadcast at the channel assignment, namely, 
The mobile allocation (set of frequencies on which to hop), 
            MA: Mobile allocation of radio frequency channels, defines the set of radio frequency channels to be used in the mobiles hopping sequence.
The index offset (to distinguish the different mobiles of the cell using the same mobile allocation). 
MAIO: Mobile allocation index offset.(0 to N 1, 6 bits).
MAIO is applied to same timeslot of different TRX (belonging to a same cell). For instance, each timeslot #3 will have a different MAIO, because they're using the same HSN.
The hopping sequence number of the cell (which allows different sequences on homologue cells)
HSN: Hopping sequence (generator) number (0 to 63, 6 bits).
HSN =0, means cyclic hopping (no hopping, generally BCCH carrier)
  • Only the 1st timeslot of the BCCH TRX cannot hop.
  • There is no real need for The broadcast channel (BCCH) to hop(Bcoz no tarffic is carried on this channel so no error or interference).
  • Remaining 7 full rate channels or 14 half rate channels may use frequency hopping.
  • Everytime a timeslot uses the BCCH frequency, it cannot use downlink power control.
Hope this tutorial answers all your question.still if you have more query post your comment or query below.