  We characterize the capacity of a low-rank wireless channel with varying
fading severity at low signal-to-noise ratios (SNRs). The channel rank
deficiency is achieved by incorporating pinhole condition. The capacity
degradation with fading severity at high SNRs is well known: the probability of
deep fades increases significantly with higher fading severity resulting in
poor performance. Our analysis of the dyadic pinhole channel at low-SNR shows a
very counter-intuitive result that - \emph{higher fading severity enables
higher capacity at sufficiently low SNR}. The underlying reason is that at low
SNRs, ergodic capacity depends crucially on the probability distribution of
channel peaks (tail distribution); for the pinhole channel, the tail
distribution improves with fading severity. This allows a transmitter operating
at low SNR to exploit channel peaks `more efficiently' and hence improves
spectral efficiency. We derive a new key result quantifying the above
dependence for the double-Nakagami-$m$ fading pinhole channel - the capacity
${C} \propto (m_T m_R)^{-1}$ at low SNR, where $m_T m_R$ is the severity
parameters (product) of the fadings involved.
