Evolution of Calling Costs over the Years

In February 1970, the charge for a 3-minute call between New York City and San Francisco was $1.35, which is $11.20 ($3.73 per minute) in today’s money. As for now, the calling charges fall between ¢5 to ¢15 per minute.
 

If calling costs were to increase like any other commodity, then a telephone call would mostly be a privilege. Thankfully, that is not the case. Moreover, the decrement didn’t just start in the 21st century.
 

For instance, here is a table representing how much calling fees decreased in the past in the US from 1927 to 1987.
 

Table Source: The Industry Analysis Division’s Reference Book of Rates Price Indices and Household Expenditures for Telephone Service, July 1987’s AT&T Interstate Residential Tariff Rates for 10-minute Calls.
 

At a glance, the above-mentioned prices may look cheap. However, it is way more in today’s pricing. According to the US Bureau of Labor Statistics’ CPI Inflation Calculator, 1927’s $4 and $15.50 are equivalent to $72.90 and $282.50 as of September 2024, respectively.
 

Calling costs didn’t just decrease for domestic calls. According to The Christian Science Monitor’s 1997 article, a person had to pay $12 for a 3-minute call to London from Boston in 1950. Eventually, it was reduced to around $3 in the 1960s.
 

After AT&T’s monopoly ended in the 80s, it opened up a new way for many companies. Initially, firms like MCI (Microwave Communications, Inc.) and Sprint started investing in fiber-optic long-distance wire, which helped cut down calling costs in the later days.

It is a well-known fact that calling has always been expensive, in contrast to sending texts. One of the main reasons is that carrier providers have a lot of manpower in the field and are also always incurring electricity and maintenance charges on top of other expenses.
 

Though it may look and sound simple, many things are going on behind the scenes. For example, when you dial a number, it is first transferred to a local telephone exchange, a part of PSTN (Public Switched Telephone Network), which uses a chain of switches and connects your call to the proper destination. Furthermore, there are a few steps in between if you are calling from a landline to a mobile phone or someone overseas.
 

In contrast, a VoIP does what its name suggests: It uses the Internet to transmit your voice from one place to another. VoIP first converts the audio to digital signals, compresses them, and transfers them to the respective destination, where the compressed data are decompressed.


A VoIP phone system is cheaper than old carrier providers. It doesn’t need any additional device and can be used with the available hardware. You can also save money on maintenance and set-up fees, which you pay to a technician.
 

Thanks to that, many people have been inclined towards implementing a VoIP phone system. So much so, reports suggest the VoIP market will be valued at a massive $236.25 billion in 2028.
 

As a result, traditional carrier providers have been compelled to decrease their costs, whether set-up fees or calling costs, even to remain in the market.
 

Furthermore, despite VoIP being introduced in 1995, which is more than a century behind the first telephone, it won’t be shocking to see it overtake traditional phone systems in the long run. One prime cause for that will also be the switch off of the UK’s PSTN by 2025 or 2027, after which the nation’s residents will need an internet connection, even to call from a landline.

Well, VoIP functions with virtual phone numbers and uses the Internet. So, whenever you call, your voice is transferred through it. Since VoIP doesn’t use traditional phone lines, international and long-distance calls can be made at affordable rates as well.
 

More importantly, you can purchase a virtual phone number of your desired destination and access it from anywhere, regardless of your current address.
 

Let’s say you are a US resident and have to make an important call to your business partner in the UK. If you were to contact them from a typical phone line, it would definitely cost you more. Rather than that, you can call them at local rates by just purchasing a UK virtual phone number.
 

Furthermore, many social media platforms, such as Facebook, Instagram, Snapchat, and others, use VoIP, allowing users to converse with their loved ones for free, no matter how far. Moreover, both parties should be registered users of the respective platforms.

In 1980, a 2,455 mile (3,950.94 km) ten-minute call on the AT&T interstate residential tariff cost $4.17 (for a day) and $1.66 (for a night), which is $15.90 and $6.33 in today's money, respectively.