The phone has come a long way since the days of Alexander Graham Bell. In the middle of the 1870's, Bell's attempt modernize the telegraph to transmit vocal sounds finally succeeded with his immortal words to his assistant: "Mr. Watson—come here—I want to see you." Watson was only in the next room, but history had been made.
From the beginning, telecommunications was a money maker. Bell and his investors became millionaires—and that was only from the patent. As time passed, further innovations were achieved. Battery-powered phones, hyper-connected operator systems, and the 1960's touch-tone phone have all revolutionized the industry. But the fundamental technology, sound waves being transmitted by electricity, never changed.
Enter the internet. Instead of using archaic phone systems with miles and miles of expensive copper wire, the basic information network has been upgraded to advanced fiber optics. When you call on a VoIP phone, the sound of your voice is compressed into data and sent along the information superhighway. When it arrives at the destination, it is decompressed as sound. More information can be sent for lower costs. That's the solution that VoIP brings: hyper-increased efficiency.