| Summary: | In a previously published transmission technique known as subcarrier index-power modulated optical OFDM (SIPM-OOFDM), a new subcarrier index-power (SIP) information-bearing dimension is introduced to enable SIPM-OOFDM to carry one extra information bit per subcarrier. As a significantly improved variant of SIPM-OOFDM, in this paper, a novel signal transmission technique termed multilevel subcarrier index-power modulated OOFDM (ML-SIPM-OOFDM) is proposed and extensively explored for the first time. It utilizes four predefined subcarrier power levels to convey two extra information bits per subcarrier in the SIP information-bearing dimension. Extensive explorations of ML-SIPM-OOFDM transmission performance characteristics are undertaken, based on which, optimum key transceiver parameters are identified. For cost-sensitive intensity-modulation and direct-detection (IMDD) passive optical network (PON) systems, it is shown that, compared to SIPM-OOFDM, ML-SIPM-OOFDM improves the signal transmission bit rate by 30%. In addition, in comparison with conventional OOFDM, a 13% increase in ML-SIPM-OOFDM signal transmission bit rate is also feasible without degrading the minimum received optical power required for achieving a BER of 1.0 x 10<sup>-3</sup>. Moreover, further 9% and 10% ML-SIPM-OOFDM signal transmission bit rate enhancements are also achievable when use is made of adaptive bit loading and subcarrier count doubling, respectively.
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