Overlapping coverage of nearby base stations is exploited in order to improve the performance of microcellular mobile radio networks. A teletraffic model is developed and the performance is analyzed for the network scenarios when overlapping coverage is and is not utilized. Furthermore, handover priority policies are considered in the analysis. The grade of service of the network is gauged in terms of the estimation of call blocking rate as well as handover failure probability. Numerical results are obtained through analytical as well as simulation modeling as possible and good agreement is achieved. The results dictate the exploitation of the overlapping coverage as alternative routes in order to improve the network performance and increase its capacity.