Dicode Pulse Position Modulation (DiPPM) has been proposed as an alternative modulation scheme to digital PPM over optical fibre channels. This paper, for the first time, analyses the receiver sensitivity of the DiPPM system on a diffuse indoor Visible Light Communication (VLC). The system operates at a bit rate of 1Gbit/s and λ = 0.65 μm. A mathematical model of the VLC using DiPPM is presented. The results show the degradation in sensitivity as normalized delay spreads increase. It is shown that with a typical delay spread of 5 ns, the DiPPM system can achieve a sensitivity of -36.47 dBm and -37.5 dBm for the error rates of 10-9 and 10-6, respectively. This represents a sensitivity improvement over a comparable digital PPM system by 3.47 dB and 3.5 dB.