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A turbo-equalization technique is presented for transmissions, where QAM constellations are constructed via block-partitioning as linear combinations of rotated, separately channel-coded BPSK components. The multilevel encoded QAM can be decoded with multistage decoding level-by-level. Iterative equalization and multistage decoding is performed via soft interference cancellation and MMSE equalization followed by soft-in-soft-out channel decoders. Due to binary channel codes both the equalizer and decoder can operate with binary likelihood values without requiring symbol/bit conversion. The resulting scheme is suitable for robust transmission when the transmitter has little or no knowledge of channel quality.