In this work, inherent data-erasing functionality of a saturated erbium doped fibre amplifier (EDFA) is exploited to achieve an all-optical wavelength reuse with pulse amplitude modulation (PAM) format. A 10 GHz bandwidth distributed feedback laser (DFB) is directly modulated with 17 Gbit/s PAM-3 data signal and transmitted downstream over a 26.58 km fibre optical line terminal (OLT) incurring a maximum penalty of 1.81 dB. A saturated EDFA deployed at the optical network unit (ONU) terminal is utilized to optically suppress the extinction ratio of residual 17 Gbit/s PAM-3 downstream data significantly from 7.1 dB to 830 mdB. This facilitates direct reuse of the downstream carrier without the need for an additional electrical data eraser. With the all optical data erasing capability of EDFA over ?10 dBm input power, the carrier re-used upstream transmission successfully delivers 17 Gbit/s PAM-3 data with a maximum transmission penalty of 0.99 dB. PAM-3 modulation format maximizes network efficiency by doubling the transmitted bits per symbol. Our technique is all-optical, it can support ultrafast systems with higher modulation formats and is power efficient.