OFDM is a technology used to compress a large amount of data into a small amount of bandwidth. This is done by dividing a large amount of data into smaller chunks, then sending that data simultaneously over a number of frequencies. The specific techniques OFDM uses allow a large amount of data to be transmitted quickly and reliably, with a minimum of loss or interference.
Using OFDM, a data channel is subdivided into the smallest size bands of frequency that can carry a small bit of information without overlapping or interfering with each other. Data is then split up and transmitted over all the sub-channels simultaneously. Because the data is split over so many channels, and because the channels are spaced exactly far enough apart so as not to interfere with each other, OFDM is more accurate, and thus more efficient, than current cellular data standards.
OFDM technology is used in certain variants of Wi-Fi (802.11a, 802.11n, MIMO), WiMax (802.16) and WiBro, ADSL, as well as number of digital broadcasting technologies such as DAB and DVB-T. OFDM promises to play an important part in any 4G (fourth generation) cellular standard as well.