This paper investigate the effect of Rician fading and correlation on the capacity and diversity of MIMO channels. The use of antenna arrays at both sides of the wireless communication link (MIMO systems) can increase channel capacity provided the propagation medium is rich scattering or Rayleigh fading and the antenna arrays at both sides are uncorrelated. However, the presence of line-of-sight (LOS) component and correlation of real world wireless channels may affect the system performance. Along with that we also investigate power distribution methods for higher capacity gains and effect of CSI at the transmitter on the capacity for range of SNR. Our investigation follows capacity gain as function of number of antennas and signal-to-noise (SNR) power ratio Block and frequency nonselective Rician fading channel is assumed, and the effect of Rician factor (L) and the correlation parameter (ρ) on the capacity and diversity gains of MIMO channels are found. Inde
