That link is only a partial explanation, where it concerns PCM multiplexing onto things like T1 telephone trunks. The A law and μ law encoding mentioned in the article are specifically used in digital telephony, A law being the European standard, and μ law being the North American standard.
In the analog world, companding is a means if mitigating the effects of a communications channel that lacks sufficient dynamic range. An example would be narrow band deviation radio systems. Compandering is used on 900 MHz trunked systems, for example. It's a means of compressing the audio wave form at transmission, and decompressing it at the receiver. The end result in both digital and analog implementations is an increased signal to noise ratio over what the communications channel is otherwise capable of providing if companding wasn't being used.
The drawback is, especially with analog compandering, what comes out on the other end isn't exactly what was sent, so there is a noticeable change in audio quality. A channel bank using μ law encoding has algorithms that do a pretty good job of putting the audio back together, although there are still some impairments that can effect certain applications. But voice sounds just fine. A compandored FM radio signal has some characteristic qualities that can be quite noticeable.