Machine-to-Machine (M2M) communications normally require low data transmission rates and low cost devices. Thus, how to modify existing cellular systems such as the Long Term Evolution (LTE) system to successfully support low cost M2M devices will become a major issue for industry.

This paper will address one solution based on the virtual carrier system, which improves bandwidth efficiency and reduces the power dissipation dramatically on the LTE downlink. Our results indicate that the virtual carrier system provides a high Signal- to-Interference-and-Noise Ratio (SINR) performance without significant Bit Error Rate (BER) degradation.