Sub-carrier multiplexed (SCM) optical fibre distributed broadband services suffer from system non-linearity and are sensitivity to noise. Thus imposing stringent noise and linearity requirements and as a result their performance is limited. However, system performance can be improved by incorporating a second stage modulator. In this paper a SCM optical transmission system employing pulse position modulation (PPM) as a second stage modulator for transmission of video, audio and data channels is reported. System measurement and theoretical predictions obtained are in close agreement and the results show an improvement in optical receiver sensitivity compared to a conventional SCM.