This project is concerned with the transmission of coded speech signal over Internet Protocol (IP). Advanced coding technique is used that is previously introduced for cellular mobile phone application. The codec used is a modified Residual Pulse Excitation - Long Term Predictor (RPE-LTP) due to its low rate coding. The use of low rate coders have improve the speech transmission over .Internet Protocol (IP) networks, since it consumes less bandwidth and does not affect the performance of data transmission severely. The codec is software implemented and verified for its correct operation. The. required 'bit rate is reduced further by omitting some of the bits representing the required parameters for the coding scheme An encryption algorithm is used to make the transmission more secure. The Serpent algorithm is used.This algorithm was one of the five candidates for the Advanced Encryption Standard (AES) contest. An objective test is used to evaluate the codec system performance, which relies on measuring the Mean Square Error (MSE). With bit reduction of the codec parameters, the MSE slightly increased. A rough subjective test is also used which shows a large decay in reconstructed speech quality.