Why do we use Twisted Shielded Pair Cable?

This question is best answered in the full context of wire selection.   A basic background in electricity will yield a basic answer, like "to reduce noise". That's true.

Let's go deeper, talk about it in terms of the physics, and find out why it reduces noise.

The answer lies in the basic principles of electrical circuit theory, where there are three key properties to consider: resistance, capacitance, and inductance.

Resistance

How do we ensure that a wire will not overheat, when we apply voltage and current to it? By selecting a wire gauge that is sufficiently large, otherwise it would have excessive resistance.  Don't use 22 AWG telephone wire to power a room air conditioner. Don't waste money buying a 12 AWG cable just to hookup a doorbell circuit.

Alright, that one was easy.  On to the tough ones. There are two kinds of electromagnetic induction: capacitive coupling (electrostatic), and magnetic coupling (electrodynamic).

Capacitance

How do we ensure that the signal transmitted over a wire, will not be degraded by excessive noise, when we place the wire into an environment, that has ambient electrical fields which tend to capacitively couple with the active signal-carrying wires? By covering the wires with a continuous metallic shield or foil, which is grounded at one or both ends. The ambient electrical fields capacitively couple with the shield instead of the active signal-carrying wires.  This helps prevent your wires from playing the role of a capacitor anode or cathode.

Inductance

How do we ensure that the signal transmitted over a wire, will not be degraded by excessive noise, when we place the wire into an environment, that has ambient electromagnetic fields which tend to inductively couple with the active signal-carrying wires? By twisting the wires continuously, from end to end.

Reason (1):  Transformer effect.  The ambient electromagnetic fields magnetically couple with thousands of very small twisted coils, instead of the entire untwisted "single-loop" signal-carrying wires (a transformer with a 1:10000000 ratio induces infinitely less noise than one with a 1:1 ratio; it's called lowering your effective loop area, ELA).  This helps prevent the wires from playing the role of a transformer primary or secondary coil.

Reason (2):  Self-cancelling twisted pairs.  Each adjacent pair of twists consists of one oppositely-wrapped loop, so each pair is self-cancelling. 

Reason (3):  Half-twists exchange proximity to noise.  On each half twist, the wire nearest to a noise-source is exchanged.   (Wikipedia Article)

 

I think item (1) is the main reason for twisting.

 

If you like this kind of stuff, you should study electrical engineering.