An optical transmitter utilizing a multi-level data modulator to produce a PDM-QPSK signal, a one-bit delay interferometer configured to correlate the multi-level data modulated signal and an optical filter configured to combine the correlated multi-level data modulated signal with one or more neighboring signals prior to transmitting over one of a plurality of optical channels. The PDM-QPSK correlated signal is configured to reduce the signal spectrum thereby increasing spectral efficiency of the transmitted signal.