This paper presents the implementation of an all-optical interferometric technique to optimize the detection of small coherent signals burried under the presence of a strong incoherent background noise. The influence of interferometer path-length imbalance, the coherence properties of the optical source and the sources of noise in an optical interferometer, to improve signal to noise ratio, are studied. The idea presented in this paper may be very useful in secured local area network applications where low frequency analoge data transmission is used. The high-rate data are carried by a modulated coherent optical signal then covered completely by a deliberately added high level of incoherent optical noise along with the ambient noise present in the environment, which makes direct detection of signal during transmission impossible. An experimental setup is constructed and implemented to verify the theoretical study. Results are in good agreement with theoretical predictions. The technique has a great potential for high-security data transfers including the financial and defense related applications.
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