There are two basic differences. One is electronic and has to be sent and received by a person trained in Morse Code; a letter is a physical document you create and send through the postal service. The other is the cost. If you send a telegram, you pay by the word, so telegrams tend to be cryptic and much shorter than letters.
The rise of e-mail has provided a method of communication that has the best of each of these ... it's almost instantaneous, and there is no direct charge for each message.
I have never sent a telegram and I don't know anyone who has.
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