We study the system capacity of cellular systems with time-division multipl
e access, slow time-frequency hopping (F-TDMA), and conventional single-use
r processing at the receivers. System capacity is formally defined as the m
aximum of the product of the number of users per cell times the user spectr
al efficiency for a given maximum outage probability. We adopt an informati
on-theoretic definition of outage as the event that the mutual information
of the block-interference channel resulting from a finite number of signal
bursts spanned by the transmission of a user code word falls below the actu
al code rate, because of fading, shadowing, and interference. Starting from
this definition, we develop a general framework which naturally takes into
account many different aspects of F-TDMA cellular systems like channel reu
se, channel utilization, waveform design, time-frequency hopping, voice act
ivity exploitation, handoff, and power control strategies. Most importantly
, our analysis does not rely on the choice of a particular coding scheme an
d can be applied to a very large class of systems in order to find guidelin
es for capacity-maximizing system design. A numerical example based on a ty
pical urban mobile environment shows that there is a considerable capacity
gap between actual F-TDMA systems and the limits predicted by our analysis,
However, this gap can be filled by carefully designed "practical" systems,
which make use of conventional single-user processing and simple coded mod
ulation schemes.