Digital data services have been offered by NTT since 1978. The largest part of the entire digital data network cost is attributable to subscriber loop transmission that includes digital service units (DSU's) and office channel units (OCU's). Therefore, it is important to reduce DSU and OCU costs for economizing on digital data services. In order to achieve this purpose, new LSI DSU and OCU have been developed. The LSI is used for a digital signal processing unit, which occupies most of the equipment cost and size. The LSI can be applied to all bearer rates from 3.2 to 64 kbits/s, for NTT digital data services (leased circuit service, circuit switched service and packet switched service). It is highly significant that adoption of the LSI in DSU and OCU makes the following estimations feasible: 1) About 30 to 40 percent Cost reduction 2) About 25 percent size reduction 3) About 30 to 50 percent failure rate reduction 4) About 50 to 70 percent power consumption reduction. Summary The most expensive part of the network that carries NTT Digital Data Services is the subscriber loop transmission system, which includes DSU and OCU. This paper describes the design philosophy for introducing LSI technology in the DSU and OCU for cost reduction. Then the function, construction and evaluation are presented for the newly developed LSI DSU and OCU, based on the above design concept.