Subcarrier multiplexed (SCM) optical network s offer a near to medium term alternative solution over high cost, evolving digital technology to distribute broadband services. Majority of existing systems are based on analogue optical transmission techniques and their principle disadvantage is the sensitivity to noise and system nonlinearities. Therefore, conventional SCM systems impose stringent noise and linearity requirements and as a result their performance is limited. A simple and attractive solution is to introduce an appropriate second stage modulator in order to improve the receiver sensitivity, hence the system performance.In this paper a SCM optical transmission system employing pulse position modulation as a second stage modulator, for transmission of video, audio and data channels is reported. Signal to noise ratio measurements obtained shows an improvement in optical receiver sensitivity compared with standard SCM systems.