Why Do We Still Pay For International Calls in 2025?

We live in an era where global communication is instant, continuous, and, thanks to apps like WhatsApp, Zoom and Messenger, usually completely free. Yes, technically the data is drawn down from your cellular data allowance, but free wi-fi is prevalent everywhere you work, shop or drink. Yet, if you, a typical New Zealand mobile user like me, pick up your phone and dial a family member in the UK, you will be hit with a retail charge that can be 50 to 100 times higher than the technical cost of routing that voice data, US$0.51/minute in my specific case. (I will use US$ as I have an international audience and everyone knows how to convert those)

This crazy-high expense over traditional calls just feels wrong in 2025, and I couldn’t resist going down the rabbit hole to find out more. It is not that interesting, so I will keep this short (5 minute read) and simple, the core question is: If a WhatsApp call, and a direct-dial both use the largely same IP transport infrastructure, where does the profit go?

This is where regulation comes in. Regulations, in all countries say that your carrier has to facilitate a reliable, voice-grade, call to where ever it may be. This is regulated because a call placed from your carrier must be able to handshake with and exchange data with the the receiving parties carrier wherever it is in the world. This involves things like, ensuring each party has a unique global address, that the data and protocols are compatible, and that there is adequate bandwidth to ensure the connection is reliable. These are governed by the International Telecommunications Union (ITU). In addition to these standards, are the safety and regulatory constraints imposed by the countries regulators (lawful intercept, CLI, emergency routing, etc). If the carrier initiating the connection fails to abide by these, the receiving carrier may reject the call or flag the violation.

Generally the above boils down to a set of charges:

The first charge is made on the sending carrier by the receiving carrier and is known as the Mobile Termination Rate (MTR) – or for landlines, the Fixed Termination Rate (FTR). This cost is payable to the receiving carrier, and applicable to any call you make to a different carrier, local or international. It is usually tiny, usually under a cent/minute and each country sets its own rates, but as an example, in December 2025 this will add approx. 0.5 cents/minute to any call received in the UK, a bit less in Australia, and a bit more than a cent in NZ.

So if the true cost is under one cent per minute, why does your international call cost so much? Well technically this is the minimum it could cost. However here is where complexity comes in. For an international call, there is generally another cost involved, and another cost that your free app such as WhatsApp completely bypasses: The International Wholesale Carrier Markup.

It also almost impossible (read costly) for your carrier to have a direct billing relationship with every single mobile network in the world, as different currencies, regulations, etc make it massively complex. Also, without owning the fibre-optic lines between countries, they cannot guarantee to meet the quality of service (QOS) standards. So what you carrier likely does is hand this complexity over to a Wholesale International Carrier – a middleman, like Lumen or Tata Communications – that guarantees a reliable phone call without dropouts, manages the contractual obligation to the country, and manages the paying of the MTR in the local currency. This middleman will then on-charge your carrier an International Wholesale Voice Rate (IWVR), which is significantly higher than the low MTR.

Your mobile carrier of course then also adds their cut on top. They already use the same infrastructure for national calls and so their cost above this is technically just the cost of the international MTR (which may be lower than the local one), administering the IWVR, plus any fraud monitoring which they may be liable for.

You can call/SMS Australia from New Zealand for free (or near-free) because carriers have entered into commercial bilateral arrangements to mutually absorb or drop the MTR costs between each other, and mostly bypass these wholesale international carriers. Mainly due to perceived threats of regulation (1), but lets be generous and say they have prioritized customer retention and data profits over the slim margins on this specific voice route. There is a caveat to extending this, and that is while Australia, The UK, US and EU may be the bulk of the calls from NZ, there are hundreds of other countries/carriers. This means in practice it is very difficult to bypass these Wholesale International Carriers, and the IWVR, especially if your two countries are widely geographically separated, or only a few dozen calls a year are made to them. E.g. my mobile carrier is not going to go to all the trouble of negotiating an agreement and invoicing arrangements with every carrier in the Congo for the dozen calls made to the Congo from NZ each year.

So in conclusion, in 2025, the cost of your international voice call is all about guaranteed quality of service and the regulations traditional carriers have to pay for to deliver this. VoIP apps route traffic on a “best-effort” basis over the public internet, requiring both parties to be connected to their app.

Even someone like Starlink, who own the world-wide data infrastructure, and have proven they can do direct to cell calls (on some phones), would be subject to such regulations if it tried to become a traditional mobile/PSTN provider.

HN Discussion here if you want to comment, add something, or clarify something. There shouldn’t be many errors as I did fact-check everything before publishing.