The radio components of the handset are like those of the base -- they convert electrical signals from the microphone into FM radio signals and broadcast them at the same frequency as the receiving crystal of the base unit. The radio components also receive radio signals at the same frequency as the broadcasting crystal from the base, convert them to electrical signals and send them to the speaker and/or buzzer (ringer).
Remember that the base and handset operate on a duplex frequency pair that allows you to talk and listen at the same time.