Circuit

Packet and circuit are fundamental terms in data communication.

To put it simply, when you connect a communication from point A to point B, it passes through several gateways/routers along the way. So depending on how they are combined, there can be many paths from point A to point B. Just as your route changes depending on how you transfer between buses and subways.

The circuit method chooses this path when the connection is first established and uses the same path until the connection is closed. In this case, you fully occupy the path while you use it, so you pay communication fees for occupying it.

The packet method splits the data to be sent into fixed-size pieces (each unit is a packet), sends each piece to the destination over a different path, and then reassembles the pieces in order. This method has the advantage of sending data without occupying a fixed path, and the fee would be determined by how many pieces you sent.

A typical example of circuit is today's voice call connection, while packet is mainly used for data communication. When you connect a voice call, you are charged by time whether you talk or not, but when data communication is connected by the packet method, you are charged by how many packets you sent and received, regardless of how long you were connected. Circuit occupies the path, so it is better for uploading/downloading large amounts of data, and packet is good when you use small amounts of data occasionally. That is, packet is cheaper for surfing small, mostly text menus on nate and the like, but once you finish surfing the menus and start downloading ringtones/pictures, circuit becomes the better deal. Of course, CDMA mobile phones add another method called code division, which acts as another variable, but they basically use the theory above as a base.

Reference: Cetizen.com Difference between packet and circuit