December 2008, Smart launched it's Plug 'n Talk service. The premise of the service is to use your Smart SIM to call and send SMS over the Internet without your GSM phone. So how it is done?
Dissecting the service, it has SIM authentication over IP, voice call and SMS. The voice call is VOIP, while the SMS is the same SMS but the medium of transport is IP.
However, to make use of the SIM, like be able to call from PC to Mobile and vice-versa and at the same time get billed from the SIM's load (yes you still need to top-up the SIM to use the service-- it is not free :D ), the SIM should be authenticated and register in the mobile operator's system. To authenticate the SIM without using your mobile device and still be online on the mobile network perspective,the technology EAP-SIM could be playing in this scenario. EAP-SIM is Extensible Authentication Protocol for GSM Subscriber Identity Module.
EAP have been around and used in the other wireless technology, the WiFi for wireless and even for wired system.
Since it connects and authenticates over IP to Operator's GSM network, there should be a gateway between IP to SS7.
The authentication server could be a RADIUS server that authenticates, authorizes and accounts the SIM usage over IP. This is almost the same with the HLR (Home Location Register) of the mobile network.
So how? In GSM network HLR database holds the IMSI and the MSISDN (acronyms used in mobile domain), the mapping of the actual dial-able number and the unique number inside your SIM plus the shared secret key called "ki"and other subscribers information. So when a SIM gets online by powering your mobile phone, it authenticates through the HLR.
In WiFI or in fixed network, the access control is done on controlled port access device. i.e. wifi access points, LAN switches, firewalls or even routers. They are called the authenticator.
While software needs to be installed or configured on the client side. This is called the supplicant (Smart Plug n Talk). Until the client is authenticated, the supplicant can only communicate with the RADIUS Server using the EAP. EAP supports variety of authentication methods including EAP-SIM authentication.
So a RADIUS can be the gateway between IP netwrok to GSM network. This RADIUS server somehow acts as a VLR (Visitor Location Register). So the SIM looks like in roaming mode.
So when inserting the Plug 'n Talk (with SIM) to notebook or desktop, it authenticates back to GSM network of Smart through IP based AAA server (RADIUS) that acts as VLR and gateway. This communication passes through IP, the basic language of the Internet.
So there it is, my take on how possibly Smart is doing it. Don't ask me the details for it is not as easy as you might think. :)