#### Example 7.2

## Companding

A method of reducing the number of bits required in a converter while achieving an equivalent dynamic range or signal to quantization noise ratio is to use a technique known as companding. The term companding comes from a combination of the words COMPressing and expANDING, which adequately describe the process involved. Essentially, in order to improve the resolution of weak signals within a converter, and hence enhance the signal to quantization noise ratio, the weak signals need to be enlarged, or the quantization step size decreased, but only for the weak signals. Strong signals, on the other hand, can potentially be reduced without significantly degrading the signal to quantization noise ratio, or alternatively the quantization step size is increased. This compression process must be matched with an equivalent expansion process in the D/A converter if the waveform integrity is to be maintained. |

Because this technique is so effective at reducing the number of A/D and D/A bits needed to provide adequate signal to quantization noise ratio for speech signals in particular, international standards have been set defining the compression and expansion ratios to be used for telephone interconnect throughout the world. There are in fact two standards, one predominantly a US standard called m-law companding, and the other a European and ITU (International Telecommunications Union) called A-law companding.