Final answer:
The process that reduces the number of bits representing information is called data compression, which is crucial for efficient digital data transmission.
Step-by-step explanation:
The process that involves reducing the number of bits needed to represent a piece of information is known as data compression. This technique is especially important for transmitting cell phone conversations, television voice, and video images as it allows for more efficient use of frequency ranges. By converting these signals into a sequence of binary ones and zeros, it becomes possible to apply various algorithms to compress the data, ensuring that less bandwidth is used while maintaining the quality of the information being sent.