The system mutual information of a multiple-input multiple-output (MIMO) system with multiple users which mutually interfere is considered. Perfect channel state information is assumed to be known to both transmitters and receivers. Asymptotic performance analysis shows that the system mutual information changes behavior as the interference becomes sufficiently strong. In particular, beamforming is the optimum signaling for all users when the interference is large. We propose several numerical

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... pproaches to decide the covariance matrices of the transmitted signals and compare their performance in terms of the system mutual information. We model the system as a noncooperative game, and perform iterative water-filling to find the Nash equilibrium distributively. A centralized global approach and a distributed iterative approach based on the gradient projection method are also proposed. Numerical results show that all proposed approaches give better performance than the standard signaling which is optimum for the case without interference. Both the global and the iterative gradient projection methods are shown to outperform the Nash equilibrium significantly. Index Terms MIMO, mutual information, cochannel interference. I. INTRODUCTION In recent years multiple-input multiple-output (MIMO) systems have attracted great attention [1]-[6]. MIMO systems have shown great potential for providing high spectral efficiency in isolated, single user, wireless links without interference [1][7][8]. Recently there has been some research devoted to MIMO broadcast channels [6] and MIMO multiple access channels [9] , where there are multiple users which mutually interfere but users either share the same transmitter or the same receiver. However, much less effort has been given to the scenario where interfering users have different transmitters and receivers. It was first shown in [2] that cochannel interference from adjacent cells in MIMO cellular systems can degrade the overall system performance significantly. We consider an MIMO interference system, where there are multiple MIMO users which mutually interfere, the transmitters send independent data streams, and the receivers decode independently. This scenario arises, for example, in MIMO cellular systems, where the user in one cell suffers from the cochannel interference from the users in other cells, or in MIMO ad-hoc networks, where each transceiver pair suffers from the interference from other transceiver pairs operating in the same frequency band. A similar single-antenna system is usually referred to as an interference channel. The capacity of the interference channel is still an unsolved problem theoretically, even for the simplest two-user additive white Gaussian interference channel. Although the optimum transmission probably involves multiuser detection techniques, most work still concentrates on the single-user detection. A distributed power control scheme involving iterative water-filling was proposed [10] for the digital subscriber line (DSL) interference channel. An iterative power control algorithm was proposed [11] for an MIMO interference system with feedback. The capacity of MIMO interference systems without feedback was treated in [12] , and it was proved that putting all power into one antenna is the optimum signaling when the interference is sufficiently strong. Recently, multiuser detection techniques were employed [5] in the interference-limited MIMO cellular systems to April 26, 2003 DRAFT