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General rightsCopyright for the publications made accessible via the Queen's University Belfast Research Portal is retained by the author(s) and / or other copyright owners and it is a condition of accessing these publications that users recognise and abide by the legal requirements associated with these rights. Abstract-In this paper, we propose a sparse multi-carrier index keying (MCIK) method for orthogonal frequency division multiplexing (OFDM) system, which uses the indices of sparse sub-carriers to transmit the data, and improve the performance of signal detection in highly correlated sub-carriers. Although a receiver is able to exploit a power gain with precoding in OFDM, the sensitivity of the signal detection is usually high as the orthogonality is not retained in highly dispersive environments. To overcome this, we focus on developing the trade-off between the sparsity of the MCIK, correlation, and performances, analyzing the average probability of the error propagation imposed by incorrect index detection over highly correlated sub-carriers. In asymptotic cases, we are able to see how sparsity of MCIK should be designed in order to perform superior to the classical OFDM system. Based on this feature, sparse MCIK based OFDM is a better choice for low detection errors in highly correlated sub-carriers.Index Terms-Sparse multi-carrier index keying, nonorthogonal OFDM, detection error propagation.