An orthogonally multiplexed QAM (O-QAM) system is a multichannel system with a baud rate spacing between adjacent carrier frequencies; this property is desirable to digitally implement the system using the discrete Fourier transformation (DFT). This paper provides a novel digital signal processing method based on an

/2-point DFT processing in the O-QAM system. A complexity comparison between a digital O-QAM system and a digital singlechannel QAM system shows that the digital O-QAM system using the new method is more economical than the digitally implemented conventional single-channel data transmission system.