Describes the maximum difference between an FM modulated frequency and the nominal carrier frequency. FM applications use peak deviations of 75 kHz (200 kHz spacing), 5 kHz (25 kHz spacing), 2.5 kHz (12.5 kHz spacing), and 2 kHz (8.33 kHz spacing).
In ham radio it is common to have an FM transmitter that, as an example, with a 2.5KHz audio tone (modulation frequency) will have an FM frequency deviation of about 5 KHz.
Modulation Index = Peak Deviation / Modulation Frequency