Statistical multiplexing is a type of communication link sharing, very similar to dynamic bandwidth allocation (DBA). In statistical multiplexing, a communication channel is divided into an arbitrary number of variable bit-rate digital channels or data streams. The link sharing is adapted to the instantaneous traffic demands of the data streams that are transferred over each channel. This is an alternative to creating a fixed sharing of a link, such as in general time division multiplexing (TDM) and frequency division multiplexing (FDM). When performed correctly, statistical multiplexing can provide a link utilization improvement, called the statistical multiplexing gain.
Generally, the methods for multiplexing data include the following :
Time-division multiplexing (TDM): information from each data channel is allocated bandwidth based on pre-assigned time slots, regardless of whether there is data to transmit. Time-division multiplexing is used primarily for digital signals, but may be applied in analog multiplexing in which two or more signals or bit streams are transferred appearing simultaneously as sub-channels in one communication channel, but are physically taking turns on the channel. The time domain is divided into several recurrent time slots of fixed length, one for each sub-channel. A sample byte or data block of sub-channel 1 is transmitted during time slot 1, sub-channel 2 during time slot 2, etc. One TDM frame consists of one time slot per sub-channel plus a synchronization channel and sometimes error correction channel before the synchronization. After the last sub-channel, error correction, and synchronization, the cycle starts all over again with a new frame, starting with the second sample, byte or data block from sub-channel 1, etc.
Asynchronous time-division multiplexing (ATDM): information from data channels is allocated bandwidth as needed, via dynamically assigned time slots. ATM provides functionality that is similar to both circuit switching and packet switching networks: ATM uses asynchronous time-division multiplexing, and encodes data into small, fixed-sized packets (ISO-OSI frames) called cells. This differs from approaches such as the Internet Protocol or Ethernet that use variable sized packets and frames. ATM uses a connection-oriented model in which a virtual circuit must be established between two endpoints before the actual data exchange begins. These virtual circuits may be “permanent”, i.e. dedicated connections that are usually preconfigured by the service provider, or “switched”, i.e. set up on a per-call basis using signalling and disconnected when the call is terminated.
Frequency division multiplexing (FDM): information from each data channel is allocated bandwidth based on the signal frequency of the traffic. In telecommunications, frequency-division multiplexing (FDM) is a technique by which the total bandwidth available in a communication medium is divided into a series of non-overlapping frequency sub-bands, each of which is used to carry a separate signal. This allows a single transmission medium such as the radio spectrum, a cable or optical fiber to be shared by many signals.
Reference used for this question: http://en.wikipedia.org/wiki/Statistical_multiplexing and http://en.wikipedia.org/wiki/Frequency_division_multiplexing and Information Systems Audit and Control Association, Certified Information Systems Auditor 2002 review manual, Chapter 3: Technical Infrastructure and Operational Practices (page 114).