The emerging smart utility networks (SUN) provide two-way communications between smart meters and smart appliances for purpose of low power usage, low cost, and high reliability. This paper deals with a bandwidth-efficient communication method based on the hidden pilot-aided scheme using a precoder in downlink SUN suitable for high-rate multimedia applications. With the aid of the design of a precoder and a superimposed hidden pilot, it is possible to estimate the channel without loss of bandwidth. In the channel estimation procedure, the inevitable data interference, which degrades the performance of channel estimation, can be reduced by the precoder design with an iterative scheme. Computer simulations show that the proposed scheme outperforms the conventional method in terms of achievable data rate, especially when a large number of subcarriers are employed.