I assume that you have already looked into technical solutions regarding bad reception (turning up the volume, requesting a better phone, etc), and that you also rule out physical hearing issues.
I have the same issue with phone calls, and I assume that it is a combination of missing visual signals and anxiety. You can't do anything practical for the first (I assume video calls or in-person meetings are out of the question), but you can try to work on the second.
For me, it helps enormously to be prepared. Before making a call, I write down what I want to achieve with the call, what topics need to be covered, what questions I have, what the other person will likely ask me, and so on. This helps with the anxiety, and with less anxiety, actually understanding the other person becomes easier.
You might also want to try some common practices against anxiety. Meditation, listening to music, deep breathing, etc. Whatever helps you to get in a good state of mind before a call.
Finally, as with most things, practice helps. You might want to consider using the phone more often in low-stakes situations (calling friends and family, ordering pizza, etc).
During the call
Anxiety can result in you talking fast, and that can result in the other person talking fast as well, making understanding difficult. So try not to talk too fast yourself.
You may also want to take notes during the call. Anxiety may lead to you forgetting things the other person has mentioned, and writing them down can help you keeping track of that. Having a written record to reference can also help with your problem of understanding, as you have a context for what the other person is saying. Taking notes may also help you to really listen to the other person.
Handling poor understanding
I also know the situation where I am asking "what?" five times in a row before giving up. Obviously, giving up is not a practical solution, especially in a business context.
If you are somewhat understanding the other person but are not quite sure, a good method is to summarize/rephrase what they are saying. If you think you heard "We need to foo the bar by tomorrow", you could say "OK, I will foo the bar by then", or "If I understood correctly, you want me to foo the bar?". In practice, you would want to use different phrases than the other person. This is a great method even when you are sure that you understood the other person, as it helps to make sure that there are no misunderstandings.
If you do not understand the other person at all, you should make that clear.
After saying "what?" or "I'm sorry, can you repeat that?" once, you should offer the other persons possible solutions to the communication problem instead of just repeating "what?". You might say "It seems that I am having bad reception, can you slow down and speak clearer?", or you might suggest other forms of communication: "This is getting rather complex. Can you send me the details via email?"