ChemE is right.
What is a byte actually? It's 8 bits, 1s and 0s. With that combination you get 2^8 combinations, ie 256. The ASCII table is a standard which assigns 256 characters to these combinations. So each combination means a character from that table. If both ends agree to this standard, then both ends know what combination means what character.
You can always interpret a byte differently and make your own table with fewer combinations, like ChemE said, you could split that byte in 2 perhaps and have each set of 4 bits yield a separate "character" whatever that would mean.