In recent times, there has been a great need driven towards the maximizing of data transfer between communication terminals thereby making efficient use of network bandwidth and disk space. Compression is the process used to reduce the phisical size of a block of information. Data encoding is the term used to refer to algorithms that perform compression. Data compression is a type of data encoding. Doyle and Carlson (2000) write that data compression “has one of the most simple and elegant design theories in all engineering”. A simple characterization of data is that it involves transforming a string of characters in some representation (such as ASCII) into a new string (0f bits for example) which contains the same information, but whose length is as small as possible. Data compression squeezes data so it requires less disk space storage, less bandwidth on a data transmission channel. Communication equipment’s like modems, bridges and routers use compression scheme to improve throughput over standard leased lines or phone lines.