The spectrum efficiency (bits/s per unit bandwidth) of a frequency-hopped-Dpskspread-spectrum modulation technique proposed for use in urban mobile radio systems is estimated. The analysis is based on simple models for the factors influencing system performance. and requires no computer simulation. It permits straightforward evaluation of spectrum efficiency over a broad range of system parameters. For an isolated service area (cell) with no propagation impairments. the efficiency is 0.12 at a bit error rate of 10-3. When interference from nearby cells is considered (assuming centrally located base stations with omnidirectional antennas). the efficiency falls to 0.03 - 0.06. depending on how much performance degradation can be tolerated near the cell boundaries. Finally, the effects of multipath (Rayleigh) fading reduce system efficiency to 0.02 - 0.05. Copyright © 1979 by The Institute of Electrical and Electronics Engineers, Inc.