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Mobile receiver complexity persists as one of the key areas of concern in the adoption of MIMO technologies for systems such as high-speed downlink packet access in UMTS. This is particularly the case for high-order modulation schemes such as 16- and 64-QAM, where optimum a posteriori probability detection becomes too complex, and sub-optimal detection based on serial or parallel interference cancellation performs poorly. The above issues are successfully tackled by introducing a judicious layered encoding process at the transmitter which, once appropriately exploited at the receiver, allows considerable reductions in computational complexity in addition to improvements in performance. Also, the applicability of high-order modulations with layered encoding is investigated using system-level simulations for a 2-cell and a 7-cell urban scenario. It is shown that high-order modulations can be used in a substantial area of the cell for both investigated scenarios.