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A frequency- and time-division multiple-access (F-TDMA)-based mobile radio system using both dynamic channel allocation (DCA) and frequency hopping (FH) is investigated. We propose a new interference adaptive DCA (IA-DCA) algorithm that is suitably designed for a network implementing FH. The role played by the power control algorithm in this DCA-FH context is also investigated. We compare the performance of our proposal to that of fixed channel allocation (FCA) with and without FH and the well-known IA-DCA schemes investigated in the literature in the absence of FH. The performance results show that interesting synergic effects can be obtained in terms of forced termination and user satisfaction probability by using both DCA and FH. The results we show in the paper have been achieved by means of a system-level simulation tool which takes propagation, user mobility, interference, traffic, and channel allocation into account. The advantages of using FH are accounted for by using a suitable analytical model that gives the frame error rate as a function of the carrier-to-interference ratio and the number of hopping frequencies, at link level; this model is taken from the literature where it was presented for FCA, and here it is modified in order to be applicable to the DCA case.