The aircraft is fitted with a "built-in cell tower" to control transmissions. These transmissions are sent from the aircraft via satellite to ground stations. The link via satellite is what makes the cost so much higher - effectively being roaming costs.
The built-in cell tower in the aircraft takes signals from the flight deck. This ensures the system is inoperative below a certain altitude eg: 15,000-20,000ft. The built-in cell tower also intercepts the transmission signals inside the cabin and thus reduces greatly any affect on aircraft systems.
The system is also able to control the types of transmissions sent. Eg: any combination of data, sms and/or voice. I agree with the comments above about the potential distractions in relation voice calls in the cabin.
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