A communication method and system that combine the internet of things (IoT) technology with fifth generation (5G) communication systems supporting a higher data rate after fourth generation (4G) systems are provided. The present disclosure may be applied to intelligent services, such as smart homes, smart buildings, smart cities, smart or connected cars, healthcare, digital education, retail businesses, and security and safety related services on the basis of 5G communication technologies and IoT related technologies. A method of a terminal in a wireless communication system to improve DMRS channel estimation performance is provided. The method includes receiving first information configuring a physical resource block (PRB) bundling size indication based on second information, receiving the second information indicating the number of at least one PRB, if the PRB bundling size indication is configured, and estimating the channel state based on an assumption that the same precoding is applied to the at least one PRB based on the second information.