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In this paper we study the performance trade-offs between conventional cellular and multi-hop ad-hoc wireless networks. We compare through simulations the performance of the two network models in terms of raw network capacity, end-to-end throughput, end-to-end delay, power consumption, per-node fairness (for throughput, delay, and power), and impact of mobility on the network performance. The simulation results show that while adhoc networks perform better in terms of throughput, delay, and power, they suffer from unfairness and poor network performance in the event of mobility.We discuss the trade-offs involved in the performance of the two network models, identify the specific reasons behind them, and argue that the trade-offs preclude the adoption of either network model as a clear solution for future wireless communication systems. Finally, we present a simple hybrid wireless network model that has the combined advantages of cellular and ad-hoc wireless networks but does not suffer from the disadvantages of either.