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The analysis of dense small‐cell networks has largely relied on the use of either unbounded path loss models that may violate the conservation of energy at very short distances, or bounded path loss models that are not tractable. In this Letter, the authors derive the coverage probability and area spectral efficiency (ASE) in closed‐forms for dense small‐cell networks by using a novel bounded path loss model. Their analytical results demonstrate that the coverage probability will monotonically decrease with the increase of base station (BS) density, and the ASE will first increase with the BS density and then reduce to zero when the network becomes ultra dense. They also give the closed‐form expression of the optimal BS density that maximises the ASE. [ABSTRACT FROM AUTHOR]