Antenna arrays have been recognized by most fourth generation CDMA systems proposals as a way to enhance the capacity and system coverage by effectively combating multipath fading and mitigating co-channel interference. The multiple access interference (MAI) problems can be overcome by power control by the process so that the average
received power at base station is same for each user. The paper introduces a new approach to outage probability analysis of prediction maximal ratio combining (MRC) diversity reception in Rayleigh fading channels. The analysis joins several of the most important factors affecting the performance of CDMA systems; including path loss, large-scale fading (shadowing), small-scale fading (Rayleigh fading), and co-channel interference (CCI) as well as for correcting mechanisms such as power control error (compensates for path loss and shadowing), spatial diversity (mitigates against Rayleigh fading), and voice activity gating (reduces CCI). We show that by controlling the power level of a user at the output of the diversity combiner (MRC) and imposing the condition that a user does not transmit when in a deep fade; the average inter-cell interference level of the system is significantly reduced. As a result of this reduction, we demonstrate analytically that the outage capacity of the system is improved more than linearly with increasing number of antenna elements.