Abstract: A method of allocating channels in a cellular system in which sectored base sites serve subscribers equipped with directional antennas. A plurality of available communication channels is divided into channel subsets. Base sites are arranged in clusters, and within each cluster: the number of channel subsets is equal to the number of base sites, is greater than the number of sectors per base site and is not a multiple of the number of sectors per base site; each channel subset is allocated once in each of the different sector directions; and the allocation pattern is not repeated within the cluster, whereby to minimize co-channel interference.