Cellular networks offer a number of advantages over alternative solutions:

• increased capacity
• reduced power usage
• larger coverage area
• reduced interference from other signals

An example of a simple non-telephone cellular system is an old taxi driver's radio system where the taxi company has several transmitters based around a city that can communicate directly with each taxi.

General characteristics

thumb|300px|GSM network architecture To distinguish signals from several different transmitters, frequency division multiple access (FDMA) and code division multiple access (CDMA) were developed.

With FDMA, the transmitting and receiving frequencies used in each cell are different than the frequencies used in each neighbouring cell. In a simple taxi system, the taxi driver manually tuned to a frequency of a chosen cell to obtain a strong signal and to avoid interference from signals from other cells. The principle of CDMA is more complex, but achieves the same result; the distributed transceivers can select one cell and listen to it. Other available methods of multiplexing such as polarization division multiple access (PDMA) and time division multiple access (TDMA) cannot be used to separate signals from one cell to the next since the effects of both vary with position and this would make signal separation practically impossible. Time division multiple access, however, is used in combination with either FDMA or CDMA in a number of systems to give multiple channels within the coverage area of a single cell.

In the simple case of the taxi company, each radio had a manually operated channel selector knob to tune to different frequencies. As the drivers moved around, they would change from channel to channel. The drivers know which frequency covers approximately what area. When they do not receive a signal from the transmitter, they will try other channels until they find one that works. The taxi drivers only speak one at a time, when invited by the base station operator (in a sense TDMA).

Broadcast messages and paging

Practically every cellular system has some kind of broadcast mechanism. This can be used directly for distributing information to multiple mobiles, commonly, for example in mobile telephony systems, the most important use of broadcast information is to set up channels for one to one communication between the mobile transreceiver and the base station. This is called paging.

The details of the process of paging vary somewhat from network to network, but normally we know a limited number of cells where the phone is located (this group of cells is called a Location Area in the GSM or UMTS system, or Routing Area if a data packet session is involved). Paging takes place by sending the broadcast message to all of those cells. Paging messages can be used for information transfer. This happens in pagers, in CDMA systems for sending SMS messages, and in the UMTS system where it allows for low downlink latency in packet-based connections.