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The paper studies the downlink single user average capacity of a generalized distributed wireless communication system (G-DWCS). For equal transmission power, the upper bound and an approximate expression of the average capacity are derived. Transmit power can also be allocated in a water-filling like fashion which may further increase power utilization efficiency. In a random antenna layout, the capacity advantage of G-DWCS over standard cell multiple input multiple output (SC MIMO) systems is analysed. Also, sub-optimum antenna selection algorithms are proposed for maximization of the average capacity. Simulation results verify the capacity analysis and capacity improvement due to antenna selection algorithms.