An OFDM signal may be regarded as the sum of a number of individual sub-carrier signals, each modulated (typically using QAM) by its own modulating signal. This composite signal is then used to modulate the main carrier.
OFDM is used in ADSL connections that follow the G.DMT (ITU G.922.1) standard. (Annex A refers to ADSL-over-POTS). The benefits of using OFDM are that it is easy to filter out noise (if a particular range of frequencies suffers from interference, the carriers within that range can be disabled or made to run slower), and that the upstream and downstream speeds can be varied by allocating either more or fewer carriers for each purpose. Some forms of Rate Adaptive DSL use this feature in real time, so that bandwidth is allocated to whichever stream needs it most.
When OFDM is used in conjunction with channel coding techniques, it is described as Coded orthogonal frequency division modulation (COFDM). As the overhead of doing this in an already digital system is low, and the gains substantial, practical OFDM/DMT systems are all actually COFDM.
Although highly complex, COFDM has high performance under even very challenging channel conditions.
By combining the OFDM technique with error-correcting codes, adaptive equalization and reconfigurable modulation, COFDM has the following properties:
The fact that COFDM is not wont to interfere easily with other signals is the main reason it is frequently used in applications such as ADSL modems in which existing copper wires are used to achief high-speed data connections. The lack of interference means no wires need to be replaced (otherwise it would be cheaper to replace them with fiber). However, DSL cannot be used on every copperpair, interference may become significant if more than 25% of phonelines coming into a Central Office are used for DSL.
COFDM is also now being used in some wireless LAN applications. Experimental users have even hooked up commercial off-the-shelf ADSL equipment to radio transceivers which simply shift the bands used to the radiofrequencies the user has licensed.
COFDM is also now widely used in Europe and elsewhere where the Eureka 147 standard has been adopted for digital radio broadcasting, and also for digital TV in the DVB digital TV standard. One of the major benefits provided by COFDM is that it renders radio broadcasts relatively immune to multipath distortion, and signal fading due to atmospheric conditions, or passing aircraft. The USA has rejected several proposals to adopt COFDM for its digital radio services, and has instead opted for 8VSB (vestigial sideband modulation) operation.
Some COFDM systems use some of the sub carriers to carry pilot signals, which are used for frequency stabilisation, as frequency shifts during the transmission using the main modulation/demodulation process transform into bit errors in the decoded data.
In wide area broadcasting, because effectively the bit rate is slowed down on each sub-carrier, receivers can benefit from receiving signals from several spatially dispersed transmitters simultaneously, so that instead of transmitters interfering with each other, they can actually reinforce coverage over a wide area. This is very beneficial in many countries, as it permits the operation of national single frequency networks, and avoids the replication of program content on different carrier frequencies which is necessary with FM or other forms of radio broadcasting. Such single frequency networks utilise the available spectrum more effectively than existing analogue radio networks.