In the field of transmission technologies, TDM and ATM are the two main competing philosophies for xDSL. Both are abbreviations, as is usual in the realm of technology. TDM stands for Time Division Multiplexing and is based on the idea to subdivide time (e.g. one second) into many smaller units.
An information unit can now be transmitted separately in each of these units. The information units need not be in a logical sequence, they could originate from several sources for example. It is therefore also used as a multiplexing technology, for example for S2M transmissions (ISDN primary multiplex connections). The advantage of this method is that only smaller units and not entire data packets are lost in case of malfunctions. In addition, glitches need not necessarily lead to the break off of the entire communication. Etherlink II and IV are TDM-based. Needless to say, different communication variants (Ethernet and E1) can be transmitted together (multiplexed) conveniently with TDM-based technologies.
ATM stands for Asynchronous Transfer Mode. The philosophy behind it is to use a constant data stream consisting of transmission cells to transmit information. The opposite would be packet-based transmission technologies known from the Ethernet. Here, the data packets are of varying sizes, using special methods to mark their beginnning and end (e.g. handshake or special identification bytes). ATM can be recognized by keywords such as VPI, VCI, UBR or VBR in the configuration of a device.
For Etherlink II and IV, your network (Ethernet, with or without E1) uses TDM to directly transmit over the 2-8-wire line, using Infineon™ chipsets. G.SHDSL Economy, and incidentally also ADSL from the Internet you’re familiar with at home, use ATM as an intermediate stage.
The ATM method makes it easier, since chipsets and ICs for xDSL using ATM are readily available from the large chipset manufacturers. Although ATM also offers you an easy way to implement IP routing unlike TDM, where it would be quite costly to implement, the TDM method works much more directly and efficiently, as you don’t have the overhead from the intermediate stage via ATM. TDM also offers a lower latency.