The importance of packet switching is that it is more economical than using private lines, especially if the amount of traffic between the two terminals does not require a dedicated circuit. Packet switching is also more economical than data when the data communication sessions are shorter than the minimum time for a chargeable call. Packet switching is the technique of sending data in small chunks called packets.
With packet switching, each packet contains destination information, thereby making it easier to send many messages quickly to various destinations. The delivery rate of the messages depends on the speed at which the data terminal equipment can transmit packets. Computers allow dynamic routing at each node.
Packet data has maximum efficiency and throughput because the network always picks the best possible route for a packet to take at any given time. Additionally, the network has an inherent intelligence that allows for graceful degradation of the network if a link or node fails. Although automatic rerouting of packets around a failed area causes congestion, it does not affect the normal functioning of the overall system. The network intelligence also identifies and corrects errors, diagnoses faults, verifies message delivery and checks reverse billing, among other important functions.