In this paper we consider the extension of a cellular system by means of satellite channels. Specifically, we consider an area covered by a number of cells that is also covered by a number of spot-beams. We consider connection-oriented service and call durations are assumed to be exponentially distributed. Also, users are mobile and, as such, they may cross cell and/or spot- beam boundaries, thus necessitating hand-offs. We incorporate the possibility of call-dropping due to unsuccessful hand-off attempts, in addition to satellite propagation delays along with the probability of new call blocking and formulate a specific cost function that must be ultimately minimized. The minimization is to be carried out by choosing (1) the optimal split of the total number of channels between the cellular and the satellite systems, and (2) the call admission and assignment policy, subject to the constraints of a demand vector that consists of an exogenous (new-call) generation process and an internal (hand- off-based) process that results from the mobility model. This complex optimization problem is solved by means of both numerical and standard clock simulation techniques along with the ordinal optimization approach. This paper was presented at the "17th AIAA International Communications Satellite Systems Conference and Exhibit", February 24-26, 1998, Yokohama, Japan.