The new digital cellular SFH900 mobile system, based on "mixed" slow frequency hopping (SFH) combined with time division, is described in detail. The system includes Viterbi quasi-coherent demodulation of GMSK for which performance measurements in multipath conditions are presented. A concatenated coding scheme that takes full benefit of built-in frequency diversity and interference diversity is introduced. A model for SFH cellular performance evaluation is presented and the quality-versus-capacity tradeoff for SFH900 is given for various frequency reuse patterns. With advanced 16 kbit/s speech coding techniques, and including a 25 percent overhead for management and signaling, the spectrum efficiency of a many-celled SFH900 network is around 3.5 users/cell/MHz, a significant increase in comparison to conventional analog systems. SFH provides intrinsic adaptability to varying traffic conditions and enhanced flexibility for multiservice operation. The SFH900 principles, which have been recently validated through field tests, are very promising for second generation cellular systems.