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The limited availability of channel resources offers a bottleneck on the allocation of channels to subscribers in wireless mobile communication systems. This paper provides a novel technique for dynamic channel assignment in mobile cellular networks by constructing a suitable objective function, the optimization of which yields a solution to the problem. The objective function has been optimized using particle swarm optimization (PSO) algorithm. The proposed channel allocation scheme has been studied with six typical benchmarks, available in the literature, and the results are promising. For instance, call rejection probability evaluated in the present context is as low as 20% even for the busiest network considered.