Today, the fixed or land line telephones in most residential homes are analogue — that is, the speaker's voice wave directly determines the signal's voltage. Short-distance calls may be handled from end-to-end as analogue signals; usually, however, telephone service providers transparently convert signals to digital for switching and transmission before converting them back to analogue for reception. The advantage is that digitized voice data can travel more cheaply, side-by-side with data from the Internet, and digital signals can be perfectly reproduced in long distance communication as opposed to analogue signals which are inevitably impacted by noise.

Mobile phones have had a significant impact on telephone networks. Mobile phone subscriptions now outnumber fixed-line subscriptions in many markets. Sales of mobile phones in 2005 totalled 816.6 million with that figure being almost equally shared amongst the markets of Asia/Pacific (204 m), Western Europe (164 m), CEMEA (Central Europe, the Middle East and Africa) (153.5 m), North America (148 m) and Latin America (102 m). In terms of new subscriptions over the five years from 1999, Africa has outpaced other markets with 58.2% growth. Increasingly these phones are being serviced by digital systems such as GSM or W-CDMA with many markets choosing to depreciate analogue systems such as AMPS.

There have also been dramatic changes in telephone communication behind the scenes. Starting with the operation of TAT-8 in 1988, the 1990s saw the widespread adoption of systems based upon optic fibres. The benefit of communicating with optic fibres is that they offer a drastic increase in data capacity. TAT-8 itself was able to carry 10 times as many telephone calls as the last copper cable laid at that time and today's optic fibre cables are able to carry 25 times as many telephone calls as TAT-8. This drastic increase in data capacity is due to several factors. First, optic fibres are physically much smaller than competing technologies. Second, they do not suffer from crosstalk which means several hundred of them can be easily bundled together in a single cable.[37] Lastly, improvements in multiplexing have lead to an exponential growth in the data capacity of a single fibre.

Assisting communication across these networks is a protocol known as Asynchronous Transfer Mode (ATM) that allows the side-by-side data transmission mentioned in the first paragraph. The importance of the ATM protocol is chiefly in its notion of establishing pathways for data through the network and associating a traffic contract with these pathways. The traffic contract is essentially an agreement between the client and the network about how the network is to handle the data, if the network can not meet the conditions of the traffic contract it does not accept the connection. This is important because telephone calls can negotiate a contract so as to guarantee themselves a constant bit rate, something that will ensure a caller's voice is not delayed in parts or cut-off completely.[40] There are competitors to ATM, such as Multiprotocol Label Switching (MPLS), that perform a similar task and are expected to supplant ATM in the future.