VoIP providers also use other audio technologies such as silence suppression, background noise removal, echo cancellation, etc, which also affect the way voice sounds, and on hold music too.
No one wants to be stuck on hold with silence (30 seconds feels like 5 minutes!).

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If it is a genre, hold music, it's fair to say, is a troubled one with few hits. It's not really meant to be loved or even listened to — it's meant to communicate something specific: Don't hang up. (Cornell makes this plea specifically at the end of his song.) Silence is believed to be a death knell for phone calls — people will simply think the line is dead and hang up. This is true even on non-hold calls; it's why phone companies transmit something called a "comfort tone" over phone lines, a barely audible synthetic noise that signals a connection is still there.