Abstract: A companded digital delta modulator which can encode both voice and voice band modem signals over a wide range of input levels is shown. The companding method or algorithm is based on measuring bit stream correlation and can be scaled to give substantially maximum performance over a wide range of signal types. The algorithm has a low sensitivity to digital channel errors, thus making it suitable for signal coding for satellite channels and the like. In addition, the digital design permits common hardware to simultaneously serve a large number of lines, thus permitting the substantial savings in the hardware cost per line. A further aspect of the invention concerns the ability to handle multiple bit delta modulation as well as single bit delta bit modulation in the above environment.