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The word companding is actually the combination or blending of the two words compressing and expanding.

This two-way radio feature is used when the device itself has a smaller dynamic range capacity and is required to transmit a large dynamic range. In this technique, the sound waves before transmission are compressed and then transmitted. Thus this allows a large bandwidth transmission over a narrow range device.

At the receivers end the sound waves are expanded enabling a full sounding signal. The two way radios have a compandor built in to facilitate this function. Both radios must have the same compandor circuitry for this feature to work between two radios.

Two-way Radio companding also has other benefits like noise reduction which improves the sound clarity and reduces the static hissing sound between two transmitted words. Crosstalk levels at the receiver are eliminated and there is an overall enhancement in the transmission quality.

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