SiO2/CdTe/SiO2 composite films in the nanocrystalline form were deposited using a multi-target magnetron sputtering system onto fused silica substrates at a system pressure similar to 15 Pa. Different sets of nanocomposite films with different ratios of the sizes of the nanocrystallites (d) and intercrystallite distances (s) were deposited by changing the relative time of sputtering during sequential sputtering of the targets. The films were characterized by measuring optical, electrical and microstructural properties. Variation of electrical conductivity with temperature indicated Efros hopping within the Coulomb gap to be the predominant carrier transport process in these composite films. A crossover from 'soft' to 'hard' Coulomb gap was observed with lowering of film temperature. Photoluminescence measurements were carried out in the temperature range 80-300 K. The experimental results were compared with those calculated from the empirical relations regarding the temperature dependence of band-edge energy.