In this paper we investigate the spectrum efficiency gain using transmitting antenna arrays at the base stations of a mobile cellular network. The proposed system estimates the angular positions of the mobiles from the received data, and allows multiple mobiles to be allocated to the same channel within a cell. This is possible by applying a transmit scheme which directs nulls against co-channel users within the cell. It is shown that multiple mobiles per cell is an efficient way of increasing capacity in comparison with reduced channel reuse distance and narrow beams (without directed nulls). The effect of the spatial spread angle of the locally scattered rays in the vicinity of the mobile is also investigated.