Unlike Nyquist's limit, Shannon's limit is valid regardless of the encoding method. Let's consider a phone line again. Thus, the maximum data rate bps. Read the fine print. Most likely, the modem uses data compression, and the high data rate is achieved only with text data.
V is the number of distinct encodings for each baud.
This result is a theoretical upper bound on the data rate in the absence of noise . Note that Shannon's result is independent of the number of distinct signal encodings. One of the most common ways of transporting information is via magnetic tapes. For instance, 8mm cassette tapes hold over 1GB of data. Indeed, newer generation machines cram 5GB of data onto a single tape.