In wireless communications, a high-frequency radio wave referred to as a "carrier wave" is used for carrying data signals. To place signals on the carrier wave is called "modulation." In broadband transmission, modulation is roughly classified into two methods: single-carrier modulation and multi-carrier modulation. The former is transmission with a single carrier wave, and the latter uses multiple carriers (subcarriers) with different frequencies, where different signals are modulated via different carriers. Multi-carrier modulation is also referred to as "frequency division multiplexing (FDM)" because signals are transmitted after combining (multiplexing) all the modulated multi-carrier signals.

Orthogonal frequency division multiplexing, or OFDM, is an effective modulation technique which narrows subcarrier spacing to improve spectral efficiency by giving subcarriers an orthogonal relationship to each other. As shown in the figure below, in conventional FDM we require guard bands which are used, not to transmit signals but, to avoid interference between adjacent subcarriers. On the other hand, in OFDM we have orthogonal subcarriers, so that they enable us to transmit signals without interference, which partially overlap each other as illustrated below. As a result, we can efficiently use the given frequency band.

In indoor or urban wireless communications, reflection from buildings, walls, etc., causes delay paths, which result in multipath channels. So far, multipath has been thought of as a factor of drop in transmission performance. On the other hand, each subcarrier in multi-carrier modulation can be regarded as a narrowband carrier wave which is robust to multipath. Multi-carrier modulation as typified by OFDM, therefore, has a benefit that it can reduce the adverse effect of multipath which has been thought of as an issue in wireless communications. The OFDM technique having these features is already used in a variety of fields such as wireless LAN, digital terrestrial broadcasting, etc.

Concepts of FDM and OFDM.