In this thesis work, bit rate reduction techniques of pulse code modulation (PCM) coded signals are studied. To reduce the data rate of PCM coded signal, we use three different schemes; elimination of intersyllabic silence in transmission, decimation (or downsampling) of voiced speech and nearly instantaneous companding. The proposed system is intended to use with the existing D-type PCM channel bank. The transmission rate of the system is 32 kbits/s per channel, and therefore the channel capacity of the existing PCM system can be made double. In studying the bandwidth-reduction system we have done theoretical analysis of buffer state and have proposed an efficient buffer control method. To investigate the performance of the overall system and to verify analysis, computer simulation has been done with real speech. The performance of conventional PCM has also been simulated. It has been found that the performance of our system is about 7 dB better than that of conventional PCM system at a given transmission rate. In addition, design of hardware system has been considered.