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Theoretical and experimental studies of multiple-input/multiple-output (MIMO) radio channels are presented. A simple stochastic MIMO model channel has been developed. This model uses the correlation matrices at the mobile station (MS) and base station (BS) so that results of the numerous single-input/multiple-output studies that have been published in the literature can be used as input parameters. The model is simplified to the narrowband channels. The validation of the model is based upon data collected in both picocell and microcell environments. The stochastic model has also been used to investigate the capacity of MIMO radio channels, considering two different power allocation strategies, water filling and uniform and two different antenna topologies, 4×4 and 2×4. Space diversity used at both ends of the MIMO radio link is shown to be an efficient technique in picocell environments, achieving capacities within 14 b/s/Hz and 16 b/s/Hz in 80% of the cases for a 4×4 antenna configuration implementing water filling at a SNR of 20 dB.