Skype is very good and offers video conferencing as well. All your contacts using Skype on their computers show up when on line and one click connects. Land line calls to any country are very cheap. You also can send text messages at cost. Well worth trying it out.
Speakers and microphone. you could have a web cam (with built in mic eg) if you wish to see them as well. There are also "Skype" phones which are like ordinary phones but they plug into say a USB port. Wireless versions are available.
Both parties have to have Skype installed on their computer systems.
All conversations are encrypted.
Latest versions of Skype have integrated video cam use (previously third party); easiest way to use Skype is with a headset as speakers' output can be picked up by your mike and relayed to the other party.