Communication system with signal processing mechanism for tone estimation and method of operation thereof

A method of operation of a communication system comprising:

• converting a number of data samples of time-domain data to frequency-domain data based on an N-point transform size;
• generating K-point data based on the frequency-domain data and the N-point transform size;
• and
• determining a tone interference frequency based on the K-point data for elimination of tone interference to improve system performance.

A communication system comprising:

• an N-point transform module for converting time-domain data to frequency-domain data based on an N-point transform size;
• a K-point transform module, coupled to the N-point transform modules, for generating K-point data based on the frequency-domain data and the N-point transform size;
• and
• a frequency calculation module, coupled to the K-point transform module, for determining a tone interference frequency based on the K-point data for elimination of tone interference to improve system performance.