Microsoft Teams Phone

Microsoft Teams Phone turns the Teams client into a full business phone system. Once it's licensed and configured, your existing Teams app gains a dialler, voicemail, call queues, auto-attendants, and the ability to make and receive calls on real phone numbers — on the desktop, on mobile, and on desk phones. For most organisations it has quietly become the default PBX replacement: the client is already deployed, the identity is already managed, and the old phone system's support contract is already up for renewal.

This guide covers what Teams Phone gives you, what it costs, and — because it's the decision that shapes everything else — how to choose between the three ways of connecting it to the public telephone network.

What you get

• Phone numbers, assigned per user or to resource accounts for shared services.
• Auto attendants — interactive voice menus ("press 1 for sales"), with business-hours routing and holiday schedules.
• Call queues — incoming calls distributed across a group of agents, with overflow and timeout handling. Design patterns in auto attendants and call queues.
• Voicemail — transcribed and delivered to the Outlook inbox.
• Call handling — music on hold, call park, shared line appearance, delegation (boss/admin scenarios), busy-on-busy, forwarding rules. Most of what a legacy PBX did, most of it self-service for the user.
• Devices — certified desk phones, headsets, and common-area phones, managed from the Teams admin centre.
• Compliance recording via certified partner integrations — covered in Teams compliance recording.
• Emergency calling — dynamic location-based emergency routing, a legal requirement in many countries and the part most often under-planned. See Teams emergency calling.

What you do not get out of the box is a contact centre. Call queues handle a helpdesk or a reception line fine; a real contact centre (skills-based routing, wallboards, workforce management) means a certified third-party contact-centre platform on top.

Licensing

Teams Phone Standard is the core licence. It's included in Microsoft 365 E5; on every other plan it's a paid per-user add-on. That licence gives you the phone system — it does not give you any connection to the phone network. PSTN connectivity is always separate: Calling Plan licences from Microsoft, a contract with an Operator Connect carrier, or your own trunks via Direct Routing.

For smaller organisations, Teams Phone with Calling Plan bundles the system licence and domestic minutes in one SKU. Devices — desk phones, headsets, Teams Rooms — are a separate capital cost, and common-area phones have their own cheaper device licence.

The PSTN decision: three connectivity models

Every Teams Phone deployment has to answer one question: how do calls reach the public telephone network? There are three models, and this choice drives cost, operations, and flexibility more than anything else in the project.

Microsoft Calling Plans — Microsoft is your carrier. Numbers, minutes, and porting all handled by Microsoft, configured entirely in the Teams admin centre. Nothing to deploy.

Operator Connect — a certified third-party carrier (BT, Verizon, NTT, and dozens of regional operators) delivers numbers and PSTN connectivity through a Microsoft-managed integration. Operationally it feels like Calling Plans — no infrastructure of your own — but the commercial relationship, tariffs, and support sit with the carrier.

Direct Routing — you bring your own SIP trunks and run (or rent) a Session Border Controller that bridges them into Teams. Maximum flexibility, maximum operational responsibility.

| | Calling Plans | Operator Connect | Direct Routing | | --- | --- | --- | --- | | Who is the carrier | Microsoft | Certified partner carrier | Any carrier you choose | | Your infrastructure | None | None | SBC (owned or hosted) | | Setup effort | Hours | Days | Weeks to months | | Geographic coverage | Limited country list | Broad, varies by operator | Anywhere you can buy a trunk | | Tariff negotiation | Microsoft's list prices | Negotiated with operator | Fully negotiated | | Analogue devices, elevators, door phones | No | Rarely | Yes, via gateways | | Contact-centre and specialist integrations | Limited | Operator-dependent | Full control | | Right when | Small footprint, covered countries, simplicity first | Most organisations | Specific requirements force it |

How to choose

• Default to Operator Connect. For most organisations it's the sweet spot: carrier-grade coverage and negotiated pricing without owning an SBC. Pick the operator per country based on coverage and price.
• Use Calling Plans when the organisation is small, sits in covered countries, and values one-vendor simplicity over tariff optimisation — or as the quick answer for small offices in a mixed estate.
• Use Direct Routing only when something concrete forces it: a carrier contract you must keep, analogue estate (door phones, DECT, elevator lines), countries no operator serves, survivable-branch requirements, or deep contact-centre integration. It works brilliantly, but you've signed up to run telco infrastructure — capacity, certificates, firmware, monitoring. The full picture is in the Direct Routing deep dive and media optimisation guide.

The detailed comparison of the two lighter models is in Calling Plans and Operator Connect.

You can mix all three

A single tenant can run all three models side by side, and global enterprises routinely do: Calling Plans for a ten-person office in a covered country, Operator Connect for the general population, Direct Routing at the sites with contact centres and analogue hardware. Users are steered by voice routing policy, so the mix is invisible to them. Don't force one model worldwide for the sake of tidiness — per-country pragmatism is the norm, not the exception.

Migration realities

Replacing a PBX is a phone-system migration, and the Teams part is usually the easy half. The work that actually determines success:

• Number porting — carrier paperwork with lead times measured in weeks, and the step you can't undo casually. Port in waves, never big-bang.
• Emergency calling — dynamic emergency addresses per site and subnet must be designed before go-live, not after. Regulators in the US (Kari's Law, RAY BAUM's Act) and elsewhere don't accept "we're mid-migration".
• IVR and queue rebuild — auto attendants and call queues rarely map one-to-one from the old system. Treat it as a redesign opportunity; decades of accreted menu options don't deserve migration.
• Dial-tone parity testing — every scenario (inbound, outbound, transfers, voicemail, emergency, fax-replacement) tested per site before cutover.
• The analogue leftovers — door entry, alarms, lift lines. Find them early; they decide whether a site needs Direct Routing gateways or can go pure cloud.

Where it fits

Teams Phone is mature enough to be the default answer for replacing a PBX in organisations already on Microsoft 365 — the marginal licensing cost is low, users already live in the client, and admin consolidates into a portal you already run. The honest caveats: heavy contact-centre operations need a partner platform, analogue-heavy sites need Direct Routing engineering, and call quality is only as good as your network — QoS and local internet breakout stop being optional once the phone system rides on them.

Start the project with the PSTN decision, per country. Everything else in Teams Phone is configuration; that choice is architecture.