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They both operate at layer2, but the difference is in the way they transfer data. ATM :
was designed in the1980s to deliver five distinct levels of QoS, so users could send traffic with greater or less delay. ATM is a cell service that uses a fixed size cell of53 bytes,5 bytes of header and48 bytes of payload. If the payload was longer than the48 bytes available, it would be split up and packaged in other cells. This was not true of frame relay, which accommodated frames of widely varying length.Frame relay:
The outgrowth of slower, more careful, error-correcting X.25, is packet technology designed to carry variable-length frames over high-quality connections such as fiber, which was just coming into its own in the early1990s when frame relay started its heyday
