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This paper proposes an efficient method for coding the prediction residual using the techniques of sub-band coding at the bitrate of 9600b/s. In the study, we use the premise that the transitional information embedded in the phoneme connections of speech are most important. The energy in the prediction residual is used to distribute the bit allocation. The relation between the transform coding and the sub-band coding is discussed along with a brief discussion on Articulation Index and its use in the selection of sub-bands.