In recent years there has been increasing interest in the use of digital methods to transmit speech signals over mobile communication networks. The advent of transistors has enabled the necessary equipment to be produced in a cheap and convenient form, combining the advantages of lightness, ease of operation, and low power consumption. The paper illustrates the use of transistors in this field by describing the more interesting design features of a 4-channel 5-digit pulse-code-modulation system employing signal compression and expansion. Consideration is also given to the transistor properties which limit the accuracy of such equipment, and it is shown that an 8-digit system is a practical proposition. the price of a digital equipment compares favourably with that of an equivalent f.d.m. unit. There are two main disadvantages of the digital system-the equipment is complex, and the transmission bandwidth required is large. Complexity is not, however, an evil in itself, but any reduction in reliability brought about by large numbers of components must be avoided. With transistor circuits, the active element, namely the transistor, is highly reliable, and owing to its low operating power, very little heat is generated inside the equipment. This makes the provision of up to 100 stages in a single small box quite a reliable proposition, and a project which could not be contemplated using valves is quite practical using transistors. Complex transistor equipment is accepted readily to-day in computers, missile control gear and many other fields, and there is every evidence that, with good mechanical design and printed wiring, the reliability is satisfactory. The large bandwidth requirement of digital systems when applied to speech frequencies has always appeared to be a wasteful and uneconomic feature, but it can be shown that over v.h.f. radio links this is not so. Taking a 4-channel case as an example, a typical mobile v.h.f. wireless set using 15kc/s f.m. deviation per channel requires a bandwidth of 200kc/s. A 4-channel 5-digit p.c.m. system requires a bandwidth of 280kc/s for double-sideband amplitude modulation and gives a channel signal/noise ratio (with compression and expansion) of nearly 50 dB. The range for the same transmitter power and output signal/noise ratio is greater for the digital system. Over cable links the bandwidth difference is more marked-20kc/s for 4-channel f.d.m., and 140kc/s for 4-channel time-division multiplex (t.d.m.). However, digital repeaters 2 are cheaper than linear f.d.m. repeaters, and although more are required in the same length of line, the total cost is no greater.(1) INTRODUCTION In communication systems which transmit a number of duplex speech channels along the same route, it is usual to combine these channels at the terminal stations, which are then connected by four wires only. Two wires transmit all the information from A to B, and the other two all the information from B to A. This arrangement saves copper if the transmission is by wire; it is also more convenient if ra...