## 1 Introduction
When higher-order modulations are used to achieve higher spectral efficiency, the performance of OFDM-IM in terms of spectral efficiency is even worse than conventional OFDM [20]. Apart from these SIM-OFDM has also been combined with multiple-input multiple-output (MIMO) systems [21; 22], providing considerable performance improvement. A dual-mode index modulation-aided OFDM (DM-OFDM) has been proposed in [23; 24]. Here, all subcarriers are utilized to transmit information. The subcarriers are divided into two subgroups, each modulated by two different constellation modes. It has been experimentally demonstrated that SIM-OFDM with digital pre-equalization achieves a much-improved BER compared to classical OFDM [25]. In [26], a variant of SIM OFDM is presented where information is carried in the location of the null subcarrier rather than the active subcarrier location. This approach results in a lower computational complexity. In ref. [27] the authors present a type of SIM OFDM called, time-domain sample index modulation (TIM) to provide efficient dimming control over a wide brightness range, while maintaining a high signal-to-noise ratio (SNR) performance and a high transmission rate. The authors call their approach, indexed dimming (iDim). The results are validated through a hardware implementation on FPGA. A dual-indexing method is presented in [28]. Here, each group is split into sub-groups, and only the selected subgroups are activated using the first set of index bits, and then, subcarriers are selected from the activated subgroups using a second set of index bits. The approach has been reported as showing an improved spectral efficiency (SE). A combination of spread spectrum (SS) and SIM-OFDM has been proposed in [29], which enables transmission across three signal domains. SS-SIM-OFDM is shown in [29] to provide better BER performance than conventional OFDM compared to a Rayleigh fading channel. After a comprehensive review of the existing literature on index modulation (IM), the authors of [30] conclude that further research is needed to combine IM with other approaches in order to improve its spectral efficiency. The authors have presented a differential index modulation technique in [31], enabling a variable sub-block size. The authors present an improved spectral efficiency as an advantage over conventional SIM-OFDM, however no results have been presented to quantify this advantage. The focus of previous work on SIM OFDM has been focused on sub-block sizes. This limits spectral efficiency and compromises flexibility. This paper presents a novel SIM OFDM approach with a variable sub-block size. The proposed scheme provides a superior bandwidth efficiency compared with conventional SIM OFDM techniques, even for higher-order modulation of the subcarriers. The novel contributions of this research include:  
* A novel variant of SIM OFDM that enables the use of variable sub-block size and a dynamic subcarrier assignment instead of a fixed one. * An improved bandwidth efficiency has been reported, while maintaining a BER performance close to that of conventional SIM OFDM. * Improved bandwidth efficiency for high order modulation of the subcarriers. This is a concern for conventional SIM OFDM.