A communications system has a cellular structure and the communications system includes a base station that is located within a cell of the cellular structure and employs a Kronecker product of azimuth and elevation precoding vectors for beamforming. Additionally, the communications system includes user equipment that is located within the cell and coupled to the base station to receive a reference channel state information process employing a reference precoding vector for use in a non-reference channel state information process to derive a compensated channel quality indication. A method of operating a communications system is also included.