A call sign is a designated sequence of letters and numbers that are assigned when a vessel, whether it be a sailing yacht, motor yacht, rib or commercial vessel, receives it’s Ship Radio Licence. The vessel also receives it’s MMSI number, so that each vessel is uniquely identified.
A call sign is used during times when there should be no ambiguity during radio communications. The coastguard, for example, will often ask for the vessel's call sign. When using the call sign each letter is spoken phonetically, which is international, so that every operator knows which vessel they are talking to. For example a vessel registered in China, with a Chinese name written in Chinese will have a call sign that could be SDH6F. When this vessel enters UK waters for example and wants to talk to the Coastguard, the Coastguard will ask for the call sign, in which the vessel would respond with.
This is Sierra, Delta, Hotel, Six, Foxtrot.
The Coastguard could then use the call sign to look up information regarding the ship’s registry.
Some countries have letters assigned to specific vessels, for example the USA use the letter N at the start of all the call signs for their navy vessels.