The present invention relates to an apparatus and method for modulating data by employing orthogonal variable spreading factor (OVSF) codes in a mobile communication system. A code generating means generates at least one spreading code to be allocated to a channel and is selected such that two consecutive pairs of in-phase (I) and quadrature (Q) data correspond to two points located on the same point in the phase domain (see figure) or are symmetrical with respect to the zero point (see fig. 9) . Data for transmission is then spread using the generated code and phase rotated by a Walsh rotator such that the phase difference between consecutive points is ninety degrees (90{). The ninety degree phase difference leads to a reduction in the peak to average power ratio (PAPR) of a mobile station. Preferably the orthogonal complex quadrature phase shift keying (OCQPSK) modulation scheme is adopted.