This concise paper describes a single channel audio coder suitable for use in Picturephone audio transmission. Companding is carried out digitally by sequential elimination of levels from the linear scheme with equally spaced quantizing levels. The basic technique, called level elimination encoding is presented and analyzed. Then a level-at-a-time coder whose quantizer consists of a linear segment followed by a level elimination segment is presented and analyzed. This two-segment coder is simulated and compared with the

logarithmic coder. Finally system implementation is presented and discussed with respect to the required logic speed.