Abstract: An ATM network comprises a central call processor, and one or more remotely located ATM bridge nodes, whereby the call processor is separated from the switching fabric in the ATM bridge nodes. A plurality of preestablished permanent virtual paths are defined within the ATM bridge nodes. In setting up a connection, a source user terminal communicates with the central call processor to obtain the virtual path identifier associated with the virtual path to one or more destination user terminals. The user data is segmented into one or more cells that incorporate a header containing the appropriate VPI. The ATM bridge node extracts the VPI from incoming cells, and then directs these cells to the appropriate output ports in accordance with a routing table. The instant invention provides for improved network efficiency and upgradability, and is particularly suited to satellite based ATM networks.