The short explanation is because VoIP uses less data.
By way of comparison, a circuit-switched opens a direct connection between two lines and eats up data for the entire duration of a call. Packet-switching doesnít need a direct connection, instead utilizing any number of routes to deliver the call information. When someone speaks, data is sent, but periods of silence donít generate data like they do on the PSTN.
Think of this this way. Back in the day, before playlists, iTunes, and Spotify, folks recorded songs off the radio onto cassette tapes. If you had a sixty-minute tape you could just press record and let the tape run in the hope that the song you wanted to hear came on in that thirty-minute window (remember thereís a Side A and a Side B), but this could waste a lot of tape.
The other option was to wait until the song came on and scramble to hit the record button in time. This way you only got the song you wanted and had room to record many more songs too.
VoIP works like option two, except that you donít have to worry about the rush to hit record.
There are plenty of advantages that go hand-in-hand with VoIP. Efficiency and cost savings are attractive in their own right. The ability to develop unified communications solutions that incorporate telephony also makes VoIP an extremely useful technology. For example, a company can integrate internet-dependent services, including voice, fax, email, instant messaging, and other real-time or data services. Having this application flexibility is a major benefit of VoIP.
Call quality persists as one area where VoIP lags behind the PSTN. The PSTN set the standard for call quality, and doesnít suffer from latency issues because the connection between the lines is constant. In other words, everything happens in real time.
With VoIP data is sent in bursts. Only when someone talks and audio gets packetized does it get passed between devices. This means that there is greater potential for latency or dropouts if packets get lost or if there are hiccups in the re-assembly process.