The reason is an attempt to avoid callsign confusion. For example, Airbus 123 and Boeing 123 on the same frequency could cause confusion so the various authorities and airlines got together and came up with the idea of alpha-numeric callsigns. Hence you could still have those two flights together, but one might be Airbus 123AB and the other Boeing 123XY.
That's very basically what happens but there are other variations and methods by which the callsigns are determined.
HTH