Provided are a terminal device and method of performing a call function transmitting ambient audio with high sensitivity.A terminal device performing a call function with at least one external device via a network may include a receiver configured to receive at least one of an audio transmission signal and a video transmission signal to be transmitted to the external device; a processor configured to analyze at least one of the audio transmission signal and the video transmission signal, select one of a speech mode and an audio mode, based on a result of the analysis, and compress the audio transmission signal, based on the selected mode; a communicator configured to transmit the compressed audio transmission signal to the external device, and receive an audio reception signal from the external device; and an output unit configured to output the audio reception signal.