Originally, per-minute billing was provided by phone companies (in the U. There was, from some services, an attempt to keep the caller aroused but short of orgasm, so he would spend more money.
(This attitude still survives among some providers.) When public (mostly female) pressure forced the phone companies to stop providing this service to sex workers, a transition was made to a manual method: pre-paid blocks of time, 10, 30, 60 minutes, whatever the customer would pay for.
Phone sex is a conversation between two or more people on the phone where one or more of the individuals is describing the act of sex.
Phone sex takes imagination on both parties' part; virtual sex is difficult if the operator does not put the images in the head of the caller and the caller must be open to the pleasure as well.
Nevertheless, phone sex should not be confused with prostitution wherein money is exchanged for real life sexual services or physical interaction.