On the Figure 1 you can see the network using 2-wire lines to connect the abonents' phones with the switching station. Each of the 2-wire lines between a phone and the switching station carries voice signals in both directions, e.g. from one phone to the other through the station and back. The switching station provides the power supply to feed the microphones and the switching functionality, which is needed if there are more than two abonents.
Figure 1. Simplified 2-wire phone network with 2 abonents
The 2-wire lines are obviously cheaper than the 4-wire lines and this is why the regular phones and switching stations were designed to operate with each other over 2-wire lines.
The above network is indeed simple and it can operate very well provided the distance between the abonents is short. Now, if we want to make calls between very distant abonents, we need to do something about the signals because of their attenuation in the long lines. So, we need to amplify the signals. But we can't just amplify what is being sent and received over the 2-wire line because there are both signals coming in both directions at the same time. The solution to this is amplification of separated send and receive signals from the 2-wire line. Such a separation is performed by a dedicated electrical device, called a hybrid. The hybrid basically provides a conversion between 2-wire and 4-wire lines (the switching stations are now connected with 4-wire lines). Another reason for signal separation is that the signals can be transmitted over digital networks between the switching stations. Digital transmission improves the quality of the calls and increases the capacity of the phone networks due to digital signal compression. This makes a more efficient use of the network equipment.
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