In this paper, a high data rate bidirectional relay network is proposed by combining the merits of spatial modulation (SM) and physical layer network coding. All nodes in the network are equipped with multiple antennas. Spatial modulation technique is used to reduce hardware complexity and interchannel interference by activating only one antenna at any time during transmission. In the proposed bidirectional relay network, transmit antennas are selected at the source nodes and relay node on the basis of the order statistics of channel power. It increases received signal power and provides a significant improvement in the outage performance. Also, the data rate of the proposed network is improved by physical layer network coding at the relay node. A closed form analytical expression for the outage probability of the network over Nakagami-m fading channel is derived and validated by Monte Carlo simulations. In addition, asymptotic analysis is investigated at high signal-to-noise ratio region.The outage performance of the proposed network is compared with SM and physical layer network coding bidirectional relay network without transmit antenna selection and point-to-point SM. With approximate SNR≈1 dB difference between the two networks, the same data rate is achieved.