Abstract: A pulse-code modulation transmission system having reduced redundancy and high transmission quality utilizes a variable companding law and variable number of bits per sample both of which vary in accordance with the type and/or short-time volume of the signal associated with a particular talker as well as with the type and/or short-time volume of all of the signals associated with all of the talkers handled by the transmission system. The system utilizes the envelope or modulating signal for the speech signal to provide a companding law which varies as the talker varies and, for a particular talker, as the short-time volume of that talker varies, so that redundancy can be reduced without impairing transmission quality. This companding law adapts itself to the vowels, consonants and syllables of the word in accordance with their volume in order to optimize the signal to quantizing noise ratio.