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Higher spectral efficiency can be achieved by exploiting the space dimension inherent to any wireless communication system using multiple receiver and multiple transmitter antennas (MIMO). There are several results that provide closed form solutions for acellular system with a single antenna at each base station and each user terminal. Results are also available for the single cell case with MIMO. A cellular system with multiple antennas at the transmitter and the receiver nodes has not been investigated to obtain a closed form solution for the capacity limit. The main information theoretic theorems are not directly applicable to this system because of the form of the channel matrix of such a system. In this paper we extend the well known Wyner's model to a MIMO cellular system. It is observed that the achievable rate is bound by an upper limit and lower limit corresponding to two extreme fading conditions: channel with Rayleigh fading and with no fading. The analytical results are verified using Monte Carlo simulations. The analysis provides the insight that for a cellular system, increasing the number of transmitting antennas is not beneficial to increase the achievable rate, and this is reflected in the results obtained.