In this paper, the network expanded problem (NEP) which optimally assigns new adding and splitting cells in PCS (Personal Communication Service) network to switches in an ATM (Asynchronous Transfer Mode) network is studied. In NEP, the locations of cells (or Base Stations, BSs) in PCS network are fixed and known, but new switches should be installed to ATM network and the topology of the backbone network may be changed. Given some potential sites of new switches, the problem is to determine how many switches should be added to the backbone network, the locations of new switches, the topology of the new backbone network, and the assignments of new adding and splitting cells in the PCS to switches of the new ATM backbone network in an optimal manner. The goal is to do the expansion in an attempt to minimize the total communication cost under budget and capacity constraints. The NEP is modelled as a complex integer programming problem. Since finding an optimal solution to this problem is Impractical. A simulated annealing (SA) algorithm is proposed to solve this problem. In the proposed SA, several heuristics are encoded into the perturbation to generate good solutions. Experimental results indicate that the proposed simulated annealing algorithm can get better performance than heuristic algorithm.