It is probably purely a function of price drops. A minor factor may have been the emergence of the Internet as a way to stay in touch more intimately in the background as it were, which would make you want to use voice more with distant friends and relatives, who you might forget if it weren't for FB wall posts or email.

But it's mainly cost crashes. And this predates Skype/IP telephony.

Overcapacity in undersea optic fiber links explains the big international collapse in prices. Between 1997 when I got to the US, and today, my cost for calling India dropped from nearly 90c a minute to less than 5c.

Within the US, Europe and Japan, I suspect it is basically the dominance of cellphone over landline, which completely changed last-mile economics. A cell tower is fundamentally far cheaper than miles and miles of copper wiring. The backbone has economies of scale, so if you can get to it cheaply, local vs. long-distance is basically irrelevant.

In other parts of the world, other reasons hold for domestic price drops. In Africa, it was leapfrogging the landline phase. In India, it was liberalization and deregulation starting in the early 90s, which opened up the domestic market to competition, which caused the hugely inefficient state telephone utility to both face efficient competition and clean up its own act.

There was also an element of leapfrogging in the rural countryside and for the urban poor who couldn't afford telephones before.

In China, I imagine it was simply a case of the state deciding things needed to change.