Digital data (11) is encoded to a set of five line symbols for optical transmission. The line symbols have amplitude values of 0, ±A1, ±A2, where |A2|>|A1|. A first binary value maps to the line symbols 0 and ±A2 and a second binary value maps to the line symbols ±A1. The amplitude values of the line symbols can be in the ratio A1:A2=1:sqrt(2). At a receiver, the received signal is photodetected to generate an electrical signal which can represent a set of three possible received symbols (RS1, RS2, RS3). Digital data (26) is recovered from the received symbols by comparing the electrical signal with a first amplitude threshold (TH1) and a second amplitude threshold (TH2).