We investigate the concept of principal modes and its application for mode division multiplexing in multimode fibers. We start by generalizing the formalism of the principal modes as to include mode dependent loss and show that principal modes overcome modal dispersion induced by modal coupling in mode division multiplexing operation, even for multi-mode-fibers guiding a large number of modes, if the product of modulation bandwidth, fiber length and differential group delay is equal or less than one in each transmission channel. If this condition is not sustained, modal dispersion and crosstalk at the receiver limit the transmission performance, setting very high constraints towards modal coupling.