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OFDM is a transmission technique that has been around for years, but only recently became popular due to the development of digital signal processors (DSPs) that can handle its heavy digital processing requirements. OFDM is being implemented in broadband wireless access systems as a way to overcome wireless transmission problems and to improve bandwidth. OFDM is also used in wireless LANs as specified by the IEEE 802.11a and the ETSI HiperLAN/2 standards. It is also used for wireless digital radio and TV transmissions, particularly in Europe.

OFDM is a multicarrier modulation (MCM) scheme in which many parallel data streams are transmitted at the same time over a channel, with each transmitting only a small part of the total data rate. DMT (discrete multitone) is a similar system used in copper-based DSL (Digital Subscriber Line) systems to overcome transmission problems. With OFDM, a high-speed digital message is divided into a large number of separate carrier waves. The receiving system reconstructs the message from the separate carriers. The technique is a coding and transport scheme comparable to the way that CDMA (code division multiple access) is a coding scheme.