In this paper, mathematical analysis supported by computer simulation is used to study cellular system information capacity change due to propagation loss and system parameters (such as path loss exponent, shadowing and antenna height) at microwave carrier frequencies greater than 2 GHz and smaller cell size radius. An improved co-channel interference model, which includes the second tier co-channel interfering cells is used for the analysis. The system performance is measured in terms of the uplink information capacity of a time-division multiple access (TDMA) based cellular wireless system. The analysis and simulation results show that the second tier co-channel interfering cells become active at higher microwave carrier frequencies and smaller cell size radius. The results show that for both distance-dependent: path loss, shadowing and effective road height the uplink information capacity of the cellular wireless system decreases as carrier frequency increases and cell size radius R decreases. For example at a carrier frequency fc = 15.75 GHz, basic path loss
exponent α = 2 and cell size radius R = 100, 500 and 1000m the decrease in information capacity was 20, 5.29 and 2.68%
