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Dynamic spectrum sharing has become an important approach to improve spectrum efficiency by exploiting traffic loads variations of multiple wireless networks when a radio band is shared. In this study, the authors present an effective centralised decision approach to deal with the problem regarding how a spectrum manager should periodically re-allocate the spectrum between two networks in a single cell, while maintaining both the call blocking and dropping probabilities in their acceptable levels, and improving the spectrum efficiency simultaneously. In the decision algorithm, a two-level model (a spectrum level model and a call level model) is used to characterise the dynamic spectrum sharing mechanism and network resource usage within the two networks. Performance analysis begins with an approximated Markov Chain analysis and an iterative approach. The authors then further validate the approximated numerical results with simulations. These numerical results demonstrate that the call blocking and dropping probabilities of each network employing dynamic spectrum sharing are much better maintained than those using a fixed allocation under heavy traffic load. The authors thus conclude that the dynamic spectrum sharing algorithm can maintain the quality of service (QoS) of each network while the effective spectrum utilisation is improved under a fluctuation traffic environment when the available spectrum is limited.