Early commercial instruments

Early telephones were technically diverse. Some used a water microphone, some had a metal
diaphragm that induced current in an electromagnet wound around a permanent magnet, and some
were dynamic – their diaphragm vibrated a coil of wire in the field of a permanent magnet or the coil
vibrated the diaphragm. The sound-powered dynamic variants survived in small numbers through
the 20th century in military and maritime applications, where its ability to create its own electrical
power was crucial. Most, however, used the Edison/Berliner carbon transmitter, which was much
louder than the other kinds, even though it required an induction coil which was an impedance
matching transformer to make it compatible with the impedance of the line. The Edison patents kept
the Bell monopoly viable into the 20th century, by which time the network was more important than
the instrument.

Early telephones were locally powered, using either a dynamic transmitter or by the powering of a
transmitter with a local battery. One of the jobs of outside plant personnel was to visit each
telephone periodically to inspect the battery. During the 20th century, telephones powered from the
telephone exchange over the same wires that carried the voice signals became common.

Early telephones used a single wire for the subscriber's line, with ground return used to complete the
circuit (as used in telegraphs). The earliest dynamic telephones also had only one port opening for
sound, with the user alternately listening and speaking (or rather, shouting) into the same hole.
Sometimes the instruments were operated in pairs at each end, making conversation more
convenient but also more expensive.

At first, the benefits of a telephone exchange were not exploited. Instead, telephones were leased in
pairs to a subscriber, who had to arrange for a telegraph contractor to construct a line between
them, for example, between a home and a shop. Users who wanted the ability to speak to several
different locations would need to obtain and set up three or four pairs of telephones. Western Union,
already using telegraph exchanges, quickly extended the principle to its telephones in New York
City and San Francisco, and Bell was not slow in appreciating the potential.

Signalling began in an appropriately primitive manner. The user alerted the other end, or the
exchange operator, by whistling into the transmitter. Exchange operation soon resulted in
telephones being equipped with a bell in a ringer box, first operated over a second wire, and later
over the same wire, but with a condenser (capacitor) in series with the bell coil to allow the AC ringer
signal through while still blocking DC (keeping the phone "on hook"). Telephones connected to the
earliest Strowger switch automatic exchanges had seven wires, one for the knife switch, one for
each telegraph key, one for the bell, one for the push-button and two for speaking. Large wall
telephones in the early 20th century usually incorporated the bell, and separate bell boxes for desk
phones dwindled away in the middle of the century.

Rural and other telephones that were not on a common battery exchange had
a magneto hand-cranked generator to produce a high voltage alternating signal to ring the bells of
other telephones on the line and to alert the operator. Some local farming communities that were not
connected to the main networks set up barbed wire telephone lines that exploited the existing
system of field fences to transmit the signal.

In the 1890s a new smaller style of telephone was introduced, packaged in three parts. The
transmitter stood on a stand, known as a "candlestick" for its shape. When not in use, the receiver
hung on a hook with a switch in it, known as a "switchhook". Previous telephones required the user
to operate a separate switch to connect either the voice or the bell. With the new kind, the user was
less likely to leave the phone "off the hook". In phones connected to magneto exchanges, the bell,
induction coil, battery and magneto were in a separate bell box or "ringer box".[16] In phones
connected to common battery exchanges, the ringer box was installed under a desk, or other
out-of-the-way place, since it did not need a battery or magneto.

Cradle designs were also used at this time, having a handle with the receiver and transmitter
attached, now called a handset, separate from the cradle base that housed the magneto crank and
other parts. They were larger than the "candlestick" and more popular.

Disadvantages of single-wire operation such as crosstalk and hum from nearby AC power wires had
already led to the use of twisted pairs and, for long-distance telephones, four-wire circuits. Users at
the beginning of the 20th century did not place long-distance calls from their own telephones but
made an appointment and were connected with the assistance of a telephone operator. [17]

What turned out to be the most popular and longest-lasting physical style of telephone was
introduced in the early 20th century, including Bell's 202-type desk set. A carbon granule transmitter
and electromagnetic receiver were united in a single molded plastic handle, which when not in use
was secured in a cradle in the base unit. The circuit diagram of the model 202 shows the direct
connection of the transmitter to the line, while the receiver was inductively coupled. In local battery
configurations, when the local loop was too long to provide sufficient current from the exchange, the
transmitter was powered by a local battery and inductively coupled, while the receiver was included
in the local loop.[18] The coupling transformer and the ringer were mounted in a separate enclosure,
called the subscriber set. The dial switch in the base interrupted the line current by repeatedly but
very briefly disconnecting the line one to ten times for each digit, and the hook switch (in the center
of the circuit diagram) disconnected the line and the transmitter battery while the handset was on the
cradle.

In the 1930s, telephone sets were developed that combined the bell and induction coil with the desk
set, obviating a separate ringer box. The rotary dial becoming commonplace in the 1930s in many
areas enabled customer-dialed service, but some magneto systems remained even into the 1960s.
After World War II, the telephone networks saw rapid expansion and more efficient telephone sets,
such as the model 500 telephone in the United States, were developed that permitted larger local
networks centered around central offices. A breakthrough new technology was the introduction of
Touch-Tone signaling using push-button telephones by American Telephone & Telegraph
Company (AT&T) in 1963.[19]

Ericsson DBH 1001 (ca. 1931), the first combined telephone made with a Bakelite housing and
handset
 

Telephone used by American soldiers (WWII, Minalin, Pampanga, Philippines)

 Video shows the operation of an Ericofon.

Modern sound-powered emergency telephone

Digital telephones and voice over IP

An IP desktop telephone attached to a computer network

The invention of the transistor in 1947 dramatically changed the technology used in telephone
systems and in the long-distance transmission networks, over the next several decades. With the
development of stored program control and MOS integrated circuits for electronic switching systems,
and new transmission technologies such as pulse-code modulation (PCM), telephony gradually
evolved towards digital telephony, which improved the capacity, quality, and cost of the network.[20]
Integrated Services Digital Network (ISDN) was launched in the 1980's, providing businesses and
consumers with access to digital telephony services such as data, voice, video, and fax services.[21]

The development of digital data communications methods made it possible to digitize voice and
transmit it as real-time data across computer networks and the Internet, giving rise to the field of
Internet Protocol (IP) telephony, also known as voice over Internet Protocol (VoIP). VoIP has proven
to be a disruptive technology that is rapidly replacing traditional telephone network infrastructure.[22]

Fixed telephone lines per 100 inhabitants 1997–2007

By January 2005, up to 10% of telephone subscribers in Japan and South Korea had switched to
this digital telephone service. A January 2005 Newsweek article suggested that Internet telephony
may be "the next big thing."[23] The technology has spawned a new industry comprising many VoIP
companies that offer services to consumers and businesses. The reported global VoIP market in
October 2021 was $85.2 billion with a projection of $102.5 billion by 2026. [24]

IP telephony uses high-bandwidth Internet connections and specialized customer premises