Block Truncation Coding (ETC) is a simple and fast image compression a
lgorithm which achieves constant bit rate of 2.0 bits per pixel, The m
ethod is however suboptimal. In the present paper we propose a modific
ation of ETC in which the compression ratio will be improved by coding
the quantization data and the bit plane by arithmetic coding with an
adaptive modelling scheme. The results compare favorable with other ET
C variants. The bit rate for test image Lena is 1.53 bits per pixel wi
th the mean square error of 16.51.