In this paper, we study the benefits of using iterative multi-user detectors for co-channel interference suppression in wireless cellular systems. We show that with a single receive antenna a receiver is capable of detecting and cancelling a single in-band interferer using the same modulation and coding scheme as the desired signal. We investigate the benefits of using such an interference canceller at the mobile unit in the downlink scenario of wireless cellular networks. Significant improvements in terms of the average system throughput and outage probability are achieved with iterative interference cancellation. The effectiveness of the interference canceller allows us to consider more aggressive frequency reuse schemes, such as using smaller cluster sizes, and using three-sectored cells where all sectors share the same frequency band.