Since WAV file size for call recording is very large, I'm looking for settings to change the file type to GSM so file size will be smaller or any other supported file(ogg, mp3, gsm) type that
will be generated with smaller size.
switch variables page has record_ext set to wav by default. You can change to mp3 for mp3 compression. Restart freeswitch if you modify here. Also know that mp3 is smaller file size but takes more CPU to compress and uncompress. I do not know how heavy that load is to the CPU.
You could run a limited test by setting in domain-variables on a test domain first.