Why are phone calls so expensive?

The answer to this question has to do with the way phone lines are constructed. The technology that made telephones communicate 100 years ago is the same one we use today. In fact, if you could plug in an ancient telephone from that era into your landline wall socket, it would work perfectly.

It all essentially comes down to analog versus digital signal. Analog signal is the way of recording data as a complex wave, which tends to lose quality the longer the distance it travels. This explains why in old movies you often saw two people talking over the phone yelling and still barely being able to hear each other. Simply, because of the great distance the signal had to travel, its quality would distort to the point of becoming unusable. On the other hand, digital signal transmits data as a stream of numbers, which is much more resistant to those problems. The old infrastructure mentioned above uses an analog signal to transmit data (your voice), however, it is quite inefficient at doing so.