What is Orthogonal Frequency Division Multiplexing (OFDM)?

Answer 1

Orthogonal frequency-division multiplexing (OFDM), also sometimes called discrete multitone modulation (DMT), is a complex modulation technique for transmission based upon the idea of frequency-division multiplexing (FDM) where each frequency channel is modulated with a simpler modulation. In OFDM the frequencies and modulation of FDM are arranged to be orthogonal with each other which almost eliminates the interference between channels. Although the principles and some of the benefits have been known for 40 years, it is made popular today by the lower cost and availability of digital signal processing components.

The main idea behind OFDM is that since low-rate modulations (i.e modulations with relatively long symbols compared to the channel time characteristics) are less sensitive to multipath, it should be better to send a number of low rate streams in parallel than sending one high rate waveform. This is exactly what OFDM is doing. It divides the frequency spectrum in subbands small enough so that the channel effects are constant (flat) over a given subband. Then a "classical" IQ modulation (BPSK, QPSK, M-QAM, etc) is sent over the subband. If designed correctly, all the fast changing effects of the channel (multipath) disappear as they are now occurring during the transmission of a single symbol and are thus treated as flat fading at the receiver.