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The joint cooperative processing of transmitted signal from several multiple-input multiple-output (MIMO) base station (BS) antenna heads is considered for users located within a soft handover (SHO) region. The system level gains and trade-offs from cooperative SHO processing are investigated. The impact of the size of the SHO region, overhead from the increased hardware and physical (time, frequency) resource utilization, and different non-reciprocal inter-cell interference distributions due to SHO are evaluated. Practical user, bit and power allocation method with different BS power constraints is provided for the proposed cooperative multiuser MIMO transmission. The overhead from SHO processing can be significant, and the call blocking probability can be dramatically increased. However, the overhead can be mitigated by using space division multiple access for users that have identical SHO active set composition. Also, the dropping probability is decreased, and thus, the total outage probability with SHO is less than without SHO. The users located at the SHO region may enjoy from greatly increased transmission rates. This translates to significant overall system level gains from the cooperative SHO processing. The proposed soft handover scheme can be used to provide more evenly distributed service over the entire cellular network.