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It can be either depending on the context of the sentence. "On the phone" means communicating using the phone, while "over the phone" is an activity conducted by phone that could ordinarily be done in person or by some other means.

Examples:

"My sister spends a lot of time on the phone."

"My secretary said that the IRS was on the phone." (calling me)

"With new smartphones, you can do much of your banking over the phone."

"I did not want to give out sensitive information over the phone."

"A weather alert system can send tornado warnings to the public over the phone."

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Q: Is the term On the phone or over the phone?
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