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Quadrature Amplitude Modulation (QAM) is a combination of amplitude shift keying and phase shift keying.

The bitstream is broken up into groups of e.g. 3 or 4 bits. Each bitgroup combination is given a unique combination of amplitude and phase shift of the carrier. In 4-QAM the bitstream is split up into groups of 2-bits, giving 22 = 4 unique combinations. 16-QAM works on groups of 4-bits, 64-QAM on groups of 6-bits and 256-QAM on groups of 8 bits.

If more bits are combined together, more information can be transported in a given bandwidth. The downside is that the signal is more vulnerable for noise and other impairments.

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