The invention relates to a telecommunication system, to a local media gateway, to an MSC server, to a radio base station and to a radio network controller for set-up, release and control of local calls in the telecommunication system. The telecommunication system comprises a core network and at least a radio access network (10, 11, 12), an MSC server (18), a central media gateway (MGW) (20) having a point of interconnection to the public switched telecommunication network and at least a radio access gateway (25, 26, 27) to each respective radio access network. A characteristic feature o the invention is that it comprises at least a local MGW (22; 23; 24) provided with switch means and geographically separated from the central MGW. The radio access gateway and the MSC server are provided with control logic for set-up and release of local calls in the respective radio access networks using the local MGW as switch. The local MGW is located in each radio access gateway or in base stations or in a RBS aggregation site connected to a plurality of radio base stations. Thereby the two legs of a local call need not be transported all the way to the MSC. Instead they are interconnected in the local MGW or the RBS aggregation site, thereby reducing costs and trombone effects.