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In Band and Out of band signaling

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In Band signaling – In-band signaling is the sending of voice data and control information in the same voice band (300Hz to 3.4 kHz) on the same channel, as used for data.
           Ex-When we dial a number this number is encoded and transmitted across the telephone line as Dual-Tone Multi-Frequency (DTMF) tones. This tone is handed by the telephone exchange switch. Then the switch is routed the call according to the Dual-Tone Multi-Frequency (DTMF) tones. When the trunk circuits were in idle (not in use), it would have a 2600 Hz signal (single tone).A failure in the trunk circuit facility would cause the absence of 2600 Hz tone. This control toned is gone through same channel which voice data is going.
Out of band signaling – Out-of-band signaling is the exchange of call control information in a separate band from dedicated channel (as in Common Channel Signaling). Out-of-band signaling establishes a separate digital channel for the exchange of signaling information. This channel is called a signaling link. Then the signaling links are used to carry all the necessary signaling messages between nodes.
Ex- When we take a call by dialing numbers, there is a trunk selected, and other pertinent information are sent between switches using their signaling links, rather than the trunks which will ultimately carry the conversation.

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In Band and Out of band signaling | Gunawan | 4.5