The utilization of an external modulation allows the coherence of laser probe pulses launched to the optical fiber to be maintained in coherent optical time domain reflectometry. However, continuous-wave (CW) component product of external modulation could considerably degrade the sensitivity of the system. In this paper, we discuss the effects of finite extinction ratio in different external modulation methods and the attempts that have been made in order to overcome these effects. A model is proposed to analyze the impact of external modulation CW component on backscattered optical signal of probe pulses from optical fiber as a function of extinction ratio, fiber length and pulse widths. External modulation can be achieved by acousto-optic modulation or electro-optic modulation. From the results obtained with the model, the advantages and drawbacks of each technology are discussed, subsequently leading to required prospective developments and refinements.