The authors discuss the possibility of transmitting synchronous digital hierarchy (SDH) signals through two-link nonlinear satellite channels. Transmitting such high-bit-rate signals through standard 54-MHz transponder bandwidth requires the use of high-level modulation schemes. The techniques and technologies needed to make the use of 16-ary QAM (quadrature amplitude modulation) transmission feasible for future satellite communication systems are examined. It is shown that it is possible to transmit a synchronous-transport-module-level 1 (STM-1) signal through a standard 54-MHz transponder bandwidth using 16-ary QAM transmission, for the 6/4-GHz band. However, for higher frequency bands, due to high fade margins needed to achieve the high availability and performance for SDH systems, it is not practical to transmit the STM-1 signal through such standard transponder bandwidths.