AbstractCommunication systems are greatly hampered by many disruptive noises in powerline communication systems (PLC), which come with strong interference, resulting in the malfunction of PLC systems. Hence, there is a need to model noise and its effect on communication systems. This paper presents noise modelling and mitigation techniques for indoor broadband powerline communication systems. To model the PLC noise, frequency domain measurements employing the GSP‐930 spectrum analyser were carried out to determine the noise frequency response in the frequency range of 1–30 MHz. The results obtained were plotted. While the analytical model for the noise model is presented, furthermore, noise mitigation techniques for multiple input multiple output PLC (MIMO‐PLC) systems in the form of spatial modulation PLC systems have been proposed. The SM‐PLC system employs the indices of the individual transmit lines to increase the data rate, as opposed to the traditional MIMO‐PLC systems, where the symbol to be transmitted is transmitted by duplicating the symbol across all lines. The proposed system uses the maximum likelihood (ML) detector at the receiver to obtain estimates of the transmitted symbols. The simulation results of the SM‐PLC system are compared with the already existing MIMO‐PLC system and show a significant improvement of ≈6 dB and 5.2 dB in signal‐to‐noise ratio (SNR) at a bit error rate of 10(−5) for spectral efficiencies of 4 bits per channel use (bpcu) and 6 bpcu, respectively. On comparison of the SM‐PLC system having a combination of additive white Gaussian noise and impulse noise at the receiver, the SM‐PLC system outperformed the traditional MIMO‐PLC by 3.5 and 3.8 dB in SNR for 4 and 6 bpcu, respectively.