As we know that either homodyne or heterodyne detection can be used to convert the received optical signal into an electrical form. In the case of homodyne detection, the optical signal is demodulated directly to the baseband. Although simple in concept, homodyne detection is difficult to implement in practice, as it requires a local oscillator whose frequency matches the carrier frequency exactly and whose  phase is locked to the incoming signal. Such a demodulation scheme is called synchronous and is essential for homodyne detection. Although optical phase-locked loops have been developed for this purpose, their use is complicated in practice.

Heterodyne detection simplifies the receiver design, as neither optical phase locking nor frequency matching of the local oscillator is required. However, the electrical signal  oscillates rapidly at microwave frequencies and must be demodulated from the IF bandto the baseband using techniques similar to those developed for microwave communication systems. Demodulation can be carried out either synchronously or asynchronously. Asynchronous demodulation is also called incoherent in the radio communication literature. In the optical communication literature, the term coherent detection is used in a wider sense.

A lightwave system is called coherent as long as it uses a local oscillator irrespective of the demodulation technique used to convert the IF signal to baseband frequencies.

*In case of homodyne coherent-detection technique, the local-oscillator frequency is selected to coincide with the signal-carrier frequency.

*In case of heterodyne detection the local-oscillator frequency  is chosen to differ from the signal-carrier frequency.