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A new model to provide more states of the Markov model while limiting the size of the Markov transition matrix is proposed to save processing time and reduce memory requirements in predicting the fading statistics and error probability of land mobile satellite systems (LMSS) and satellite personal communication services (S-PCS). Propagation fading is treated as slow fading (or shadowing) and fast fading (or multipath fading). Both of these levels can be separated into several propagation states. Two Markov state transition matrices are introduced to simulate the variation in the strength of the received signal caused by shadowing and multipath fading. Fading statistics and error probability in typical mobile user environments are accurately predicted. The advantage of this new model over the traditional single Markov state transition model is that it can generate more accurate simulation results and help to predict performance. This simple and efficient model extends the application of the Markov process method to propagation channel modelling for LMSS and S-PCS.