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Recent research results show that the use of partially overlapped channel (POC) can significantly improve network capacity. In this paper we present an analytical model to estimate the capacity improvement added by the use of POC in wireless networks. We mathematically characterize the effect of node density, node distribution, network topology and traffic pattern on the performance of POC based approach. We conclude that POC based approach outperforms traditional non-overlapping multichannel approach in most scenarios except for extremely dense networks where no interference is tolerated at all. Our results indicate that POC based approaches have more advantage in relatively denser network with a heavier traffic load. These results provide us the theoretical incentive to use POCs in crowded wireless environments. We validate the results with simulations and experiments.