Due to the significantly reduced cost and effort for system calibration time-division multiplexing (TDM) is a
commonly used technique to switch between the transmit and receive antennas in multiple-input multiple-output (MIMO) radio channel sounding. Nonetheless, Baum et al. [1], [2] have shown that phase noise of the transmitter and receiver local oscillators, when it is assumed to be a white Gaussian random process, can cause large errors of the estimated channel capacity of a low-rank MIMO channel when the standard channel matrix estimator is used. Experimental evidence shows that consecutive phase noise samples affecting measurement samples collected with real TDMMIMO channel sounders are correlated. In this contribution a capacity estimator that accounts for the phase noise correlation is proposed. The estimator is based on a linear minimum mean square error estimate of the MIMO channel matrix. It is shown by means of Monte Carlo simulations assuming a measurementbased phase noise model, that the MIMO channel capacity can be estimated accurately for signal to noise ratios up to about 35 dB