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A system is described that reduces the required transmission-path capacity of multiplex pulse-code modulation systems. Simple predictive techniques are used to remove redundant samples from the digitised speech signals. The impairments produced by such a system are identified and methods of minimising them are investigated. It is concluded that the number of baseband channels can be doubled, compared with conventional p.c.m., for the same bandwidth. A model was constructed that simulated the operation of the proposed system. Signal-to-noise measurements and subjective tests on the model confirmed the findings of the theoretical analysis.