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Amazon Music Teams Telephony - Simply Explained
Teams Telephony, now known as Microsoft Teams Phone, transforms Microsoft Teams into a complete cloud-based business phone system. In this episode of Microsoft Knowledge Nuggets on M365 FM, Mirko Peters explains how organizations can replace traditional PBX systems with a modern, Microsoft 365-integrated telephony platform that supports internal collaboration and external voice calling from a single application.
You'll learn how Teams Phone enables users to make and receive calls from desktops, mobile devices, Teams-certified desk phones, and meeting room systems while benefiting from enterprise-grade security, scalability, and centralized management. The episode explains the different connectivity options, including Microsoft Calling Plans, Operator Connect, and Direct Routing, helping listeners understand which approach best fits their business requirements.
The discussion also covers essential Teams Telephony features such as voicemail, call forwarding, Auto Attendants, Call Queues, presence integration, call transfers, and hybrid work support. Rather than treating voice as a separate communication platform, Teams Phone unifies chat, meetings, collaboration, and telephony into a single Microsoft 365 experience that improves productivity and simplifies IT administration.
Whether you're an IT administrator planning a telephony migration, a Microsoft partner designing modern workplace solutions, or a business leader evaluating cloud phone systems, this episode provides a practical introduction to Microsoft Teams Phone. Discover the licensing considerations, deployment options, best practices, and common implementation challenges to help your organization modernize enterprise communications with confidence.
Quick answer: Microsoft Teams Phone is the focus of this M365 FM episode, which explains what it does, where it fits in the Microsoft ecosystem, and the architecture, security, governance, or operational choices that matter before teams adopt or manage it.
In today's fast-paced business world, effective communication is essential. Microsoft Teams Telephony stands out as a cloud-based phone system that integrates seamlessly with Microsoft Teams. This innovative solution reshapes how you connect with colleagues and clients. Currently, 6% of businesses have adopted cloud-based phone systems like Teams Telephony. Before this technology, organizations faced significant challenges. Employees often dealt with call issues, poor network quality, and confusion from managing multiple phone numbers. With Teams Telephony, you can enhance your communication efficiency and keep your team connected, no matter where they are.
Key Takeaways
- Microsoft Teams Telephony is a cloud-based phone system that improves communication for businesses.
- It reduces costs by eliminating the need for expensive hardware and maintenance.
- Teams Telephony enhances security with features like end-to-end encryption to protect sensitive information.
- You can set up Teams Telephony easily by buying licenses and assigning phone numbers to users.
- The system allows you to make and receive calls from any internet-enabled device, making it perfect for remote work.
- Teams Telephony includes advanced features like voicemail transcription and intelligent call routing to streamline communication.
- Using Teams Telephony can lead to improved collaboration and productivity within your organization.
- Many businesses report significant savings and better communication after switching to Teams Telephony.
What Is Teams Telephony?
Microsoft Teams Telephony is a cloud-based phone system that revolutionizes how you communicate in your business. It replaces traditional PBX systems with a software-driven solution hosted in the cloud. This means you can make and receive calls using your business number from various internet-enabled devices, such as PCs, mobile phones, and tablets. The integration with Microsoft Teams enhances collaboration by combining internal communication with external telephony.
Benefits of Teams Telephony
Using Teams Telephony offers numerous advantages for your organization:
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Cost Efficiency: Transitioning to Microsoft Teams Telephony significantly reduces expenses related to hardware and maintenance. You can allocate your budget more effectively while enjoying budget-friendly communication.
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Enhanced Security: Microsoft prioritizes security with end-to-end encryption and compliance with regulations like HIPAA and GDPR. This ensures that your sensitive communications remain protected.
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Flexibility in Communication: Teams Telephony allows you to access features globally. You can communicate seamlessly regardless of your location, making it ideal for remote work.
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Simplified IT Management: By eliminating the need for on-premises telephony equipment, Teams Telephony simplifies your IT environment. You can manage everything through the Microsoft 365 administration portal, allowing you to provision new users in minutes.
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Seamless Integration: Teams Telephony expands the voice capabilities of Microsoft Teams into a fully-fledged enterprise telephony system. You can make and receive calls, hold meetings, and manage contacts all within the same platform.
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Advanced Features: Teams Telephony includes features such as call transfer, call queues, auto-attendants, voicemail, and music on hold. These tools enhance your communication workflows and improve customer experiences.
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Support for Remote Collaboration: Unlike traditional phone systems, Teams Telephony integrates with the Microsoft ecosystem. This integration provides features that enhance collaboration, such as call data analytics and the ability to use your business phone number on any device.
Setting Up Microsoft Teams Phone System
Setting up the Microsoft Teams Phone System is a straightforward process that allows you to enhance your business communication. Follow these steps to get started:
Initial Setup Steps
- Buy and assign a Teams Phone license for each user. This is essential for enabling calling features.
- Choose a PSTN connectivity option. You can select from Microsoft Calling Plan, Direct Routing, or Operator Connect based on your needs.
- Get and assign phone numbers for users and services. This step ensures that everyone can make and receive calls using their business numbers.
- Set up emergency calling with defined emergency locations. This is crucial for compliance and safety.
- If desired, set up an auto attendant for call navigation. This feature helps direct incoming calls efficiently.
- If desired, set up a call queue for managing incoming calls. This allows you to handle multiple calls without losing any.
- Finally, set up other Teams Phone features as needed. Customize the system to fit your organization's requirements.
Licensing Requirements
Before deploying the Microsoft Teams Phone System, you must meet certain licensing requirements. Each user needs a Microsoft 365 license. If you have Business Premium or E3 plans, you will also need an additional Teams Phone license for calling. The Teams Phone Standard license costs approximately $8 per user per month. Additionally, if you opt for the Microsoft Calling Plan, expect to pay an extra $12 to $18 per user per month for PSTN connectivity.
Here’s a quick overview of the different licenses you might need:
| License Type | Prerequisite License(s) |
|---|---|
| Microsoft Teams Phone Standard | Microsoft 365 Business Basic/Business Standard/Business Premium/F1/F3/E3/A3; Microsoft Teams EEA; Microsoft Teams Enterprise; Microsoft Teams Essentials (AAD Identity); Office 365 F3/E1/E3/A1/A3 |
| Microsoft Teams Phone Standard for Frontline Workers | Microsoft 365 F1/F3; Office 365 F3 |
| Microsoft Teams Phone with Calling Plan | Microsoft 365 Business Basic/Business Standard/Business Premium/F1/F3/E3/A3; Microsoft Teams EEA; Microsoft Teams Enterprise; Microsoft Teams Essentials (AAD Identity); Office 365 F3/E1/E3/A1/A3 |
You should also consider additional licenses for shared devices or resource accounts if you plan to use features like Auto Attendants and Call Queues.
By following these steps and understanding the licensing requirements, you can effectively set up the Microsoft Teams Phone System and enhance your organization's communication capabilities.
Making and Receiving Calls
With Microsoft Teams Telephony, you can easily make and receive calls from anywhere. This system offers several methods for initiating calls, ensuring you have flexibility in how you connect with others.
How to Make Calls
You can make calls in Microsoft Teams using various methods. Here are the main steps:
- Make a call from your voicemail: Access your voicemail via History and select Voicemail. Choose More actions next to a name to Call back.
- Make a call from your contacts: Go to Calls > View contacts and select Call next to a contact's name.
- Use the dial pad: Navigate to Calls, enter the number using the dial pad, and select Call.
- Hover over someone's profile picture: Hover over a profile picture to see options for video or audio calls.
- Use commands: Type /call in the search box, enter a name or number, and the call will start automatically.
These methods make it simple for you to connect with colleagues or clients, enhancing your communication experience.
How to Receive Calls
Receiving calls in Microsoft Teams Telephony is just as straightforward. The system provides several features to help you manage incoming calls effectively. Here’s a look at some key call handling features:
| Feature | Description |
|---|---|
| Advanced Routing | Route calls based on skills, business hours, holidays, or user presence with Teams-based logic. |
| Live Call Monitoring | Supervisors can listen, whisper, or barge into calls to support agents in real time. |
| Queue Management | Agents manage their queue availability through the app, and supervisors monitor queue health. |
| IVR Support | Set up smart call flows using no-code tools or JSON-based configurations. |
| Analytics & Reporting | Access insights on abandoned calls, average wait time, and agent performance. |
| Secure Call Recording | Record queue calls with secure Azure storage. |
| Contact Search and Presence | Instantly search and filter contacts, view availability, and transfer calls with a single click. |
| Call Summaries and Callback Reminders | Use AI prompts to auto-generate call summaries or action lists. |
| Customizable Layouts | Tailor the console to fit your workflow with multiple layout options. |
| Chat Consult Transfers | Transfer calls using adaptive cards that let recipients accept or reject transfers directly. |
| Accessibility Built-In | Full support for screen readers and keyboard navigation. |
These features ensure you can handle calls efficiently, whether you are in the office or working remotely. With Microsoft Teams Telephony, you can manage your communication seamlessly, making it easier to stay connected.
PSTN Options for Teams Telephony
When considering Microsoft Teams Telephony, you have several options for connecting to the Public Switched Telephone Network (PSTN). Each option offers unique benefits and caters to different organizational needs. Here’s a breakdown of the available PSTN options:
Microsoft Calling Plans
Microsoft Calling Plans provide a straightforward solution for businesses. With this option, Microsoft acts as the PSTN carrier, managing your phone numbers and calls.
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Advantages:
- Simple setup process.
- No need to coordinate with multiple vendors.
- Fully managed by Microsoft, which simplifies management.
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Disadvantages:
- Limited coverage in only 33 countries.
- Can be expensive for larger organizations needing many lines.
| Advantages | Disadvantages |
|---|---|
| Fully managed by Microsoft | Limited number availability in many countries |
| No own infrastructure needed | Higher cost per minute |
| Predictable costs | Less flexibility and control |
Direct Routing and Operator Connect
Direct Routing and Operator Connect offer more flexibility for organizations that want to use their existing telephony infrastructure or preferred providers.
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Direct Routing connects Microsoft Teams to the PSTN through your own Session Border Controller (SBC). This option provides high flexibility, allowing you to customize your telephony setup.
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Operator Connect allows you to use existing PSTN providers with Teams. This option simplifies the process by letting certified providers connect directly to Microsoft Teams.
| Feature | Direct Routing | Operator Connect |
|---|---|---|
| Connection Method | Connect Teams with your own SBC | Microsoft-approved telecom providers connect directly |
| Management Responsibility | You manage SIP trunks, SBC, and voice routing policies | Providers handle routing; Teams admins assign policies |
| Flexibility | Full flexibility for advanced routing or hybrid setups | Simplicity and quick deployment |
| Best For | Enterprises needing full control and custom configurations | Organizations wanting simplicity and quick deployment |
According to recent statistics, 71.4% of Microsoft Teams Phone users prefer Direct Routing over Microsoft Calling Plans. This preference highlights the demand for flexibility and control in telephony systems.
Core Features of Microsoft Teams Phone
Microsoft Teams Phone offers a range of core features that enhance your communication experience. These features streamline call management and improve productivity, making it easier for you to connect with colleagues and clients.
Voicemail and Call Management
Voicemail in Microsoft Teams Phone goes beyond traditional systems. One standout feature is voicemail transcription. This feature automatically converts audio messages into text. You can read your messages instead of listening to them, which is especially useful in meetings or noisy environments. You can quickly scan for key details, such as names or phone numbers, without replaying the audio multiple times. This capability also creates a searchable record of your voicemails, making it easy to find important information later on.
In addition to voicemail transcription, Teams Phone provides robust call management features. Here are some key functionalities:
| Feature | Description |
|---|---|
| Call delegation | Share your phone line with others to make and receive calls on your behalf, with customizable notifications. |
| Integrated dial pad | Dial by name or number directly in the search bar, enhancing call efficiency. |
| External Caller ID | Displays detailed caller information from the corporate directory for internal calls, improving identification. |
| Device switching | Switch calls between devices seamlessly, enhancing mobility. |
| Presence-based call routing | Controls incoming communications based on your presence, allowing for selective blocking. |
These features ensure that you can manage your calls effectively, whether you are in the office or working remotely.
Intelligent Call Routing
Intelligent call routing is another powerful feature of Microsoft Teams Phone. This functionality allows you to direct incoming calls based on various criteria, such as user presence or specific business rules. You can set up routing options that prioritize calls to available team members, ensuring that customers receive timely responses.
Here are some additional features related to intelligent call routing:
- Call park and retrieve: Park calls and retrieve them using a unique code, allowing flexibility in call handling.
- Federated calling: Securely connect and collaborate with users in different organizations, expanding your communication capabilities.
- Video calling: Make face-to-face video calls if enabled, enhancing your communication experience.
With intelligent call routing, you can optimize your team's responsiveness and improve customer satisfaction.
Security is also a top priority in Microsoft Teams Phone. The system employs several measures to protect your call data:
- End-to-end encryption safeguards calls and messages in transit.
- Identity and access controls integrate with Azure AD for policy enforcement.
- Compliance tools support eDiscovery, retention, and regulatory standards like HIPAA and GDPR.
These security features ensure that your communications remain confidential and secure, allowing you to focus on your work without worrying about data breaches.
Comparing Teams Telephony with Other Solutions
When you consider telephony solutions for your business, understanding the differences between Microsoft Teams Telephony, traditional PBX systems, and other VoIP solutions is crucial. Each option has unique features that can impact your communication strategy.
Key Differences
Here’s a comparison of Microsoft Teams Telephony and traditional PBX systems:
| Feature | Microsoft Teams Phone | Traditional PBX Systems |
|---|---|---|
| Cost Efficiency | Reduces IT costs, no hardware required | High maintenance & hardware costs |
| Remote Access | Available on any device, anywhere | Limited to physical office phones |
| Call Management Automation | AI-powered call routing & transcription | Manual call handling |
| Security & Compliance | End-to-end encryption, HIPAA & GDPR compliant | Limited security features |
| Scalability | Easily adds new users & integrates with Microsoft 365 | Requires manual expansion & costly upgrades |
Cloud telephony represents a significant shift from traditional systems. It allows voice communication services to be delivered via the cloud. Unlike traditional PBX systems that require physical infrastructure, Teams Telephony operates through an off-site cloud-hosted PBX. This setup enables seamless call routing and configuration without the need for physical wires.
Pros and Cons
Pros of Microsoft Teams Telephony:
- Cost Savings: Many businesses report a 143% ROI after switching to Teams Telephony. You can save on equipment and maintenance costs. For example, one organization reduced its monthly phone bills from AUD $4,500 to approximately AUD $1,000.
- Scalability: You can create new business phone extensions in minutes. There’s no need to install new wiring or handsets.
- Collaboration: Teams Telephony enhances collaboration by enabling employees to communicate effectively from anywhere. This flexibility ensures that your team remains productive, regardless of location.
- Centralized Management: You can monitor and resolve issues from easy-to-use dashboards. This feature simplifies your communication infrastructure.
Cons of Microsoft Teams Telephony:
- Dependency on Internet: Since it relies on cloud calling, a stable internet connection is essential. Poor connectivity can disrupt communication.
- Learning Curve: Transitioning to a new system may require training for employees. Familiarizing your team with the new features can take time.
In contrast, traditional VoIP solutions often lack the seamless integration found in Teams Telephony. While they may offer basic voice calling capabilities, they do not provide the same level of collaboration tools or scalability.
Ultimately, choosing the right telephony solution depends on your business needs. Microsoft Teams Telephony stands out for its cost efficiency, flexibility, and integration with the Microsoft ecosystem, making it a strong contender in the modern communication landscape.
In summary, Microsoft Teams Telephony transforms how you communicate in your business. This cloud-based phone system enhances collaboration and streamlines workflows by integrating with Microsoft 365. You can enjoy features like voicemail transcription, mobile-first calling, and intelligent call routing.
Consider the benefits that many organizations have experienced. For instance, 75% of employees reported improved collaboration using Teams. Additionally, case studies show significant productivity increases, such as a 30% reduction in meeting times for a mid-sized marketing agency.
As you explore Microsoft Teams Telephony, you will find that it not only simplifies communication but also supports your team's needs in a flexible and secure manner.
FAQ
What is Microsoft Teams Telephony?
Microsoft Teams Telephony is a cloud-based phone system that integrates with Microsoft Teams. It allows you to make and receive calls using your business number from any internet-enabled device.
How do I set up Microsoft Teams Telephony?
To set up Microsoft Teams Telephony, you need to buy licenses, choose a PSTN option, assign phone numbers, and configure emergency calling. Follow the setup steps outlined in the blog for detailed guidance.
Can I use my existing phone numbers with Microsoft Teams Telephony?
Yes, you can use your existing phone numbers with Microsoft Teams Telephony through Direct Routing or Operator Connect. This flexibility allows you to retain your current numbers while enjoying new features.
What are the licensing requirements for Microsoft Teams Telephony?
Each user needs a Microsoft 365 license and an additional Teams Phone license. The Teams Phone Standard license costs around $8 per user per month, with additional fees for PSTN connectivity.
Is Microsoft Teams Telephony secure?
Yes, Microsoft Teams Telephony prioritizes security with end-to-end encryption and compliance with regulations like HIPAA and GDPR. These measures protect your sensitive communications.
Can I access Microsoft Teams Telephony on mobile devices?
Absolutely! Microsoft Teams Telephony works on various devices, including smartphones, tablets, and laptops. You can stay connected and make calls from anywhere.
What features does Microsoft Teams Telephony offer?
Microsoft Teams Telephony includes features like voicemail transcription, call queues, auto-attendants, and intelligent call routing. These tools enhance your communication workflows and improve customer experiences.
How does Microsoft Teams Telephony compare to traditional phone systems?
Microsoft Teams Telephony offers cost efficiency, flexibility, and seamless integration with Microsoft 365. Unlike traditional systems, it eliminates hardware costs and simplifies management through the cloud.
🎧 Listen to this episode
Want a practical explanation of Teams Telephony? This episode breaks down the topic in clear language and shows why it matters for Microsoft 365, Azure, Power Platform, security, AI, and modern work.
Listen to this episode if you want to:
- Understand the key concepts behind Teams Telephony
- See how it fits into the wider Microsoft technology ecosystem
- Learn where it can create practical value for your organization
You may also enjoy these related M365 FM episodes:
- ARM Templates vs Bicep: Why Azure Teams Are Switching
- Microsoft Teams Hidden Features with Josh Blalock [MVP]
- High-Stakes Hybrid Events with Microsoft Teams and Mesh
- From Microsoft Lync to Teams with Carsten Lund Meilbak [MVP]
- Microsoft Teams Governance with Entra ID as the Control Plane
Discover more practical Microsoft conversations on M365 FM.
Last reviewed: July 2026.
Who Should Listen
This episode is for Microsoft administrators, architects, developers, security professionals, and business leaders who need a practical foundation before making implementation or governance decisions.
🎧 You Should Also Listen To
- Azure Virtual Desktop — A closely related next step that adds useful context and practical depth.
- Microsoft Intune — A closely related next step that adds useful context and practical depth.
- Viva Connections — A closely related next step that adds useful context and practical depth.
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You've probably seen the phone icon in Teams
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and wondered if you can actually make a call from there.
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The answer is yes.
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And it's much more powerful than you might expect.
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By the end of this episode, you'll understand
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what Teams Telephony is, how it replaces your old office phone
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system, and the three main ways to connect it
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to the outside world.
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Traditional phone systems are expensive, complex,
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and tied to a desk.
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Teams Telephony changes all of that.
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It turns your laptop, phone, or tablet into your work phone,
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and it follows you wherever you go.
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We'll break it down into four building blocks, what it is,
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how it connects, what it costs, and what it can do for you.
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What Teams Telephony actually is.
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So what is Teams Telephony really?
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The simplest way to put it?
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It's a cloud-based phone system built
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right into Microsoft Teams.
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No separate hardware box, no tangled wires,
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no blinking lights on a server rack.
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It's all software.
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And that means you can get started in minutes, not days.
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Think of your old phone system like a private switchboard
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inside your office building, where every desk had a wire
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running back to that box.
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If you wanted to move someone's desk,
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you had to physically rewire things.
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Teams Telephony is that same switchboard,
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but it lives in Microsoft's cloud and follows you everywhere.
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Your phone number is no longer tied to a physical location.
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It's tied to you.
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The key point is this.
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Teams Telephony turns your laptop, smartphone,
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or tablet into your work phone.
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Same number on every device.
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So when someone calls your office number,
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it rings on whichever device you're signed into.
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You don't need a physical desk phone anymore.
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Why does this matter?
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Because you're not stuck at your desk to take business calls.
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You can work from home, from a coffee shop, from a client's office,
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and your phone goes with you.
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No call fording to set up, no separate apps to juggle.
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It's all built into Teams.
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Let me give you a concrete example.
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Imagine you're working from home and someone calls your office number.
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It rings on your laptop, you answer with your headset,
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and that's it.
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No forwarding, no hassle.
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The caller has no idea you're not at your desk.
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And if you need to step away,
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you can transfer the call to your smartphone
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and keep talking while you walk to the kitchen.
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So whether you're at home in the office or on the go,
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your work phone is always with you.
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What does this mean for you?
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Your phone is now an app that's always with you,
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working the same way,
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whether you're at your desk in a meeting room or on the road.
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The same dial pad, contacts, and call history, all inside Teams.
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That's the beauty of it, right?
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How it replaces a traditional PBX?
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So how does Teams actually replace the phone system's businesses
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have used for decades?
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Let me walk you through the old way first.
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20 years ago, buying a business phone system
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meant getting a big black box called a PBX,
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private branch exchange, that sat in a closet
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and routed calls through copper wires.
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Every desk phone had to be physically wired back to that box.
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VoiceMail was a separate system with its own tapes
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or digital storage and adding a new employee
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meant calling the phone company, waiting for a technician
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and paying for installation.
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That whole setup was expensive to buy, costly to maintain,
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and pricey to upgrade.
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The old way required a phone line for every desk,
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a separate system for VoiceMail and a technician
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for even simple changes like moving a phone.
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When the hardware aged out every five to seven years,
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you had to replace the whole thing at significant cost.
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Teams Telephone does all of that in software.
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There's no box, no wires, and you don't need a technician
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for simple changes.
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Microsoft runs the switchboard in their cloud data centers
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so you just need an internet connection
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and a license for each user.
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That's it.
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Let me explain the cloud PBX concept in simple terms.
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Instead of buying and maintaining your own switchboard
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in the office, you're renting a spot on Microsoft switchboard.
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They handle the complicated stuff
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like rooting, redundancy, and security updates.
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You just tell them which users get which numbers
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and everything else happens automatically.
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For small businesses, this is huge.
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You get enterprise grade features without the enterprise-sized
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price tag or complexity.
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A five-person company can have the same phone system
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capabilities as a 5,000-person company,
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auto-attendance, call-cuse, VoiceMail with transcription,
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all that used to cost thousands in add-on hardware are just included.
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Here's a concrete example.
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Adding a new employee used to mean ordering a new phone line
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from your carrier, waiting days or weeks for installation,
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and having a technician configure the PBX.
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With Teams, you assign a phone license and a phone number
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in the admin center.
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It takes about five minutes and the new employee
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signs into Teams to find their phone working.
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What this means for you is that your phone system scales
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with your business.
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You can add users instantly and remove them just as fast
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with no hardware to buy or replace.
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If you grow from 10 people to 50,
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you don't need a bigger box in the closet, just more licenses.
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The three ways to connect to the phone network.
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Now here's the part that confuses most people.
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How does Teams actually connect to the outside world?
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There are three ways.
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Here's the problem.
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Teams handles internal calls between people in your company
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for free.
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If you're both on Teams, you can call each other
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without extra cost.
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But to call a regular phone number,
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like a customer's mobile or a supplier's landline,
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you need a connection to the public telephone network.
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That's the network every phone in the world is connected to.
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And Microsoft gives you three choices
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for how to get there.
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First option is Microsoft calling plans.
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This is the simplest approach.
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You buy phone numbers and calling minutes directly from Microsoft
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and they handle everything.
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You don't need to talk to your phone carrier at all.
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The cost runs about $8 to $15 per user per month,
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depending on the plan.
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But it's not available everywhere.
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Microsoft calling plans only work in certain countries.
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So if you have offices in places where Microsoft
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doesn't offer the service, you'll need another option.
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Second option is operator connect.
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This is where you keep your existing phone carrier,
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but they connect directly into Teams
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with no extra hardware needed.
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Your carrier manages the connection on their end.
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Think of it as your phone company
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plugging their service straight into Microsoft system.
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This is becoming more popular
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because it gives you the simplicity of a managed service
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while keeping your existing carrier.
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Many major phone companies now offer operator connect,
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so it's worth asking yours.
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Third option is direct routing.
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The most flexible approach, but also the most technical.
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You use your own equipment, a device called
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a session, border controller or SBC
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to connect your existing phone lines to Teams.
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You manage the connection yourself
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or your IT partner does it for you.
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This gives you the most control
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and it's often the cheapest option
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if you already have phone lines
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and just want to connect them to Teams.
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But it requires someone who knows what they're doing
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to set it up.
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Here's an analogy.
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Calling plans is like buying a prepaid phone from Microsoft.
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Simple and everything's included,
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but you're limited to what Microsoft offers.
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Operator connect is like keeping your current carrier
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but plugging them into Teams.
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Your carrier handles the connection
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and you just use the service.
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Direct routing is like building your own bridge
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between your existing phone lines and Teams.
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It takes more work, but you get exactly what you want.
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Why does this matter?
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Because you're not locked into one approach.
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You can choose based on your budget,
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your location and your existing contracts.
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A small business in the US
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might use Microsoft calling plans for simplicity.
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A global company with offices in multiple countries
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might use Operator Connect to keep local carriers
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in each region and a company that already has phone lines
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and a good relationship with their carrier
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might choose direct routing to save money.
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What this means for you is that you have options.
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Don't let the technical names scare you.
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Your IT partner or Microsoft reseller
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can help pick the right one based on your situation.
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You don't need to become an expert
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on session border controllers.
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You just need to know that the options exist.
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Licensing and costs simplified.
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So you know what it is and how it connects.
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Next question everyone asks,
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how much does it actually cost?
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Here's the good news.
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If you already have Microsoft 365,
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your part way there because teams is included
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in your subscription, but telephony is an add-on,
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and you need two pieces to make it work.
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First you need a team's phone license
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which unlocks the phone system features
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like making and receiving calls, setting up auto-attendance
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and using voicemail and that costs about $8 to $10 per user per month.
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Second you need a way to connect to the phone network,
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which is one of the three options we just talked about.
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So the total cost is the phone license
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plus the calling plan or connection.
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Let me break down the pricing a little more.
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Teams phone standard costs about $10 per user per month
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and gives you all the PBX features.
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Then you add a calling plan on top of that
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which runs $8 to $15 per user per month
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depending on how many minutes you need
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or you can use operator connect or direct routing
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which is often cheaper per minute
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but has different pricing structures.
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How does this compare to a traditional phone system?
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A typical on-premise PBX costs about $15 to $25 per user per month
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when you factor in hardware, maintenance contracts
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and phone lines and that's just the recurring cost
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because you also have to buy the hardware upfront
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which could be thousands of dollars.
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Teams phone is often 30 to 60% cheaper than that
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so if you're spending $20 per user per month on your old system
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you might end up spending 10 to $14 per user per month with Teams.
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But here's something you need to watch out for.
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The real world cost can be two to three times
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the headline license price once you add calling minutes and support.
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So don't just look at the $10 number
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and assume that's your total cost.
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You need to factor in the calling plan
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any international calling and the cost of support
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if you're working with a partner.
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So get a full quote before you make a decision.
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Let me give you a concrete example.
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For a 10 person company, Teams phone might cost $150 to $250
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per month total for phone licenses plus a calling plan
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while a traditional PBX for the same company
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could easily cost $300 to $500 per month.
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Plus you had to buy the hardware upfront
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so you're saving money from day one
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and you never have to replace expensive hardware again.
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What this means for you is that it's almost certainly
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cheaper than what you're paying now,
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but get a full quote and don't forget
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to factor in the cost of your internet connection
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because Teams phone needs good internet to work well.
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And if your internet is slow or unreliable,
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you might need to upgrade that too.
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Features that matter to you.
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OK, so it's cheaper and simpler, but what can it actually do?
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Let's talk about the features that matter.
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The basics are straightforward.
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You can make and receive calls, transfer calls,
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put calls on hold and see your call history all inside Teams.
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Nothing complicated there, but the features
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that really make a difference are the ones
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that used to cost you extra money.
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Voice mail with transcription is a good example.
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When someone leaves a message,
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you get a written transcript right in your Teams chat
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so you can read it instantly instead of dialing
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into a voice mail box and listening through prompts.
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And if you want to hear the actual recording,
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you can play it back with one click.
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But most of the time, the transcript is enough
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because you know who called and what they wanted
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without ever listening to a message.
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Auto attendance are another big one.
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Think of it as a virtual receptionist
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that greets callers and roots them to the right place,
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like press one for sales, press two for support.
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You don't need a human being to answer the phone
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because the system handles it automatically based
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on the time of day, the day of the week, even holidays.
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And if your office is closed,
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the auto attendant can play a different greeting
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and offer to take a message.
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All of this used to require expensive hardware
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or a third party service, but now it's just a setting in Teams.
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Call Q's work hand in hand with auto attendants.
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When someone presses one for sales,
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the call goes into a queue
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and rings the first available person in the sales team.
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And if everyone's busy, the caller
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he has music or a message while they wait
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while the system distributes calls evenly
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so nobody gets overwhelmed, perfect for support teams,
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reception desks or any group that handles incoming calls.
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Delegation is a feature that assistants love.
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An assistant can make and receive calls
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on behalf of a manager.
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And when they call out, it shows up as the manager's number.
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So if a client calls back, they reach the manager,
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not the assistant.
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And it's a simple thing, but it makes a huge difference
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in how professional your company sounds.
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Call Park is one of those features
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you don't know you need until you use it.
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You put a call on hold, the system gives you a code,
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you walk to another room, pick up a different phone,
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enter the code and the call connects.
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Great for moving between meeting rooms
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or handing off a call to a colleague
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in another part of the building.
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And then there's presence integration.
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You can see if someone is on a call before you call them
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because their status shows in a call right next to their name
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so you know not to interrupt.
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And it reduces the number of times you call someone
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only to get sent to voicemail
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because they're already talking to someone else.
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Why does all this matter?
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Because these features used to require expensive add-ons
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or completely separate systems.
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Auto-attendants were a separate product.
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voicemail transcription was a premium service.
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Call Q's required special hardware,
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but now they're all built into Teams phone
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and you don't pay extra for them.
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Let me give you a concrete example.
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A small law firm with three lawyers
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can set up an auto-attendant for their main number
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where callers press one to reach the first lawyer
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two for the second, three for the third.
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And if nobody answers the call,
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goes to voicemail and the lawyer gets a transcript
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in their Teams chat.
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And they can call back from their laptop
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or their phone with no receptionist needed,
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no extra hardware, no separate voicemail system.
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Everything works inside the app they already use
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for email and meetings.
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What this means for you is that you get a professional phone
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system without the professional price tag.
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Small businesses can sound like large enterprises
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and it all works inside the app you already use.
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Security and reliability.
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Now let's talk about something that worries people.
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Security and reliability.
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Moving your phone system to the cloud sounds risky.
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What if it goes down?
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What if someone eavesdrops on your calls?
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Those are fair questions and here's how Microsoft handles them.
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Start with encryption.
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Every call made through Teams is encrypted in transit.
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That means the audio is scrambled as it travels
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between you and the person you're talking to
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using the same security standards
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that online banking users.
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For one to one calls, you can even enable end-to-end encryption.
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The audio is encrypted on your device
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and decrypted only on the other person's device.
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So no one, not even Microsoft can listen in.
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Uptime is another big concern.
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Microsoft guarantees 99.99% uptime for Teams phone,
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which works out to less than five minutes of downtime per year.
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Five minutes.
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Most on-premise phone systems can't match that
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because they depend on a single box in your office.
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If that box fails, your phones are down until someone fixes it.
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With Teams, Microsoft runs multiple data centers around the world.
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If one goes down, another takes over automatically.
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Identity protection is built into Teams users
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your Microsoft 365 log-in to authenticate you.
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So if you have multi-factor authentication enabled
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and you should, your phone system is protected by the same security.
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Someone can't just pick up a desk phone and make calls as you.
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They need your credentials and your second factor.
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Think of it like a reception desk that checks your ID
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before letting you into the building.
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Compliance is another area where Teams phone shines.
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It supports industry standards like HIPAA for healthcare
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and GDPR for privacy.
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Recording and archiving are built in
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so you can meet regulatory requirements
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without buying separate software.
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If you're in a regulated industry,
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you can record calls, store them securely,
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and produce them for audits.
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Here's the thing.
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Your phone system is now as secure
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as the rest of your Microsoft 365 environment.
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You don't need a separate security setup for your phones.
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The same policies that protect your email and your files
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also protect your calls.
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Let me give you a concrete example.
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A healthcare clinic uses Teams phone for patient calls.
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All calls are encrypted.
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The clinic can record calls for compliance purposes.
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Voice mails are stored securely.
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And because Teams supports HIPAA,
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the clinic stays compliant with regulations.
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No separate security system needed.
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What this means for you is that you're not trading security
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for convenience.
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The cloud version is often more secure
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than an old on-premise system.
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Microsoft has security teams and infrastructure
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that most small businesses could never afford on their own.
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How all the pieces connect.
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Let's step back and see how all these pieces
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fit together into one system.
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Because Teams telephony isn't just one thing.
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It's a cloud PBX, a connection to the phone network,
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and a set of features.
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All wrapped in the Teams app you already use
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for chat and meetings.
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Here's the aha moment.
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Most people miss.
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Most of us think of a phone system as hardware.
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00:14:25,480 --> 00:14:26,320
A box in a closet.
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Why is in the walls?
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A plastic handset on your desk.
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But Teams telephony is something different entirely.
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It's an identity.
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Your phone number is attached to you not to a desk.
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00:14:34,960 --> 00:14:37,400
Wherever you sign into Teams, your phone follows.
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00:14:37,400 --> 00:14:39,040
Sign in on your laptop in a coffee shop
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00:14:39,040 --> 00:14:40,400
and your office number rings there.
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00:14:40,400 --> 00:14:42,200
Sign in on your phone while you're traveling.
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And it rings there.
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The number doesn't move.
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You do.
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Now watch how the pieces interact.
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The customer calls your main number.
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00:14:48,520 --> 00:14:50,600
The auto attendant picks up and plays a greeting.
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00:14:50,600 --> 00:14:52,320
The caller presses one for support.
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00:14:52,320 --> 00:14:53,880
That sends the call to a call queue.
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00:14:53,880 --> 00:14:55,960
The queue rings the first available support agent
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00:14:55,960 --> 00:14:56,880
on their laptop.
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00:14:56,880 --> 00:14:58,240
If they answer, great.
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00:14:58,240 --> 00:15:00,600
If everyone's busy, the caller hears music on hold.
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00:15:00,600 --> 00:15:02,520
If nobody answers after a certain time,
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00:15:02,520 --> 00:15:03,800
the call goes to voicemail.
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00:15:03,800 --> 00:15:05,120
The system transcribes the message
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00:15:05,120 --> 00:15:06,600
and sends it to your Teams chat.
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00:15:06,600 --> 00:15:09,600
You read it, call back, and the whole cycle starts again.
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All automatic.
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No human intervention needed.
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Why does this matter?
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Because these pieces work together
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to create a seamless experience.
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You don't have to think about the technology.
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00:15:17,960 --> 00:15:19,440
The auto attendant doesn't need someone
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00:15:19,440 --> 00:15:20,880
to manually transfer calls.
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00:15:20,880 --> 00:15:23,360
The call queue doesn't need someone to watch who's available.
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00:15:23,360 --> 00:15:24,560
The voicemail doesn't need someone
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00:15:24,560 --> 00:15:25,840
to check a separate inbox.
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It all just happens.
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Let me walk you through a full example
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so you can see how smooth it is.
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00:15:29,800 --> 00:15:31,520
A customer calls your main number.
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00:15:31,520 --> 00:15:33,960
The auto attendant asks them to press one for support.
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00:15:33,960 --> 00:15:35,320
The call goes to the support queue.
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00:15:35,320 --> 00:15:37,400
It rings the first available agent on their laptop.
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They answer, help the customer, and hang up.
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00:15:40,240 --> 00:15:42,280
If that agent was already on another call,
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00:15:42,280 --> 00:15:44,440
the system would ring the next available person.
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00:15:44,440 --> 00:15:47,160
If everyone was busy, the caller would get voicemail.
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00:15:47,160 --> 00:15:49,280
And later you'd see the transcript in Teams.
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00:15:49,280 --> 00:15:51,320
No missed calls, no lost messages,
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00:15:51,320 --> 00:15:53,080
no angry customers who couldn't get through.
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00:15:53,080 --> 00:15:54,720
What this means for you is that the magic
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00:15:54,720 --> 00:15:56,160
isn't any single feature.
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00:15:56,160 --> 00:15:58,560
It's how they all connect to make your work life easier.
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00:15:58,560 --> 00:16:00,040
The auto attendant, the call queue,
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00:16:00,040 --> 00:16:02,760
the voicemail transcription, the presence indicators,
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00:16:02,760 --> 00:16:04,040
they're designed to work together
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00:16:04,040 --> 00:16:05,760
so you don't have to think about them.
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00:16:05,760 --> 00:16:09,480
You just do your job and the phone system handles the rest.
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00:16:09,480 --> 00:16:10,800
Actionable takeaways.
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00:16:10,800 --> 00:16:12,080
So what should you do next?
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00:16:12,080 --> 00:16:13,160
I get this question a lot.
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00:16:13,160 --> 00:16:15,280
Here are three simple steps to get you moving.
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00:16:15,280 --> 00:16:18,480
Step one, check if your current Microsoft 365 license
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00:16:18,480 --> 00:16:20,040
already includes Teams phone.
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00:16:20,040 --> 00:16:22,600
If you have an E5 license, you're good.
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00:16:22,600 --> 00:16:24,360
The phone system is already included.
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00:16:24,360 --> 00:16:26,640
If you have E3 or business premium,
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00:16:26,640 --> 00:16:29,560
you'll need to add the Teams phone license separately.
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00:16:29,560 --> 00:16:32,000
It's about $8 to $10 per user per month.
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00:16:32,000 --> 00:16:34,520
You can check this in your Microsoft 365 Admin Center
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00:16:34,520 --> 00:16:36,640
under billing and it takes about two minutes.
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00:16:36,640 --> 00:16:37,880
Seriously, it's that quick.
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00:16:37,880 --> 00:16:40,160
It's a simple check that saves you a lot of money.
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00:16:40,160 --> 00:16:42,280
Step two, talk to your phone carrier
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00:16:42,280 --> 00:16:44,720
or a Microsoft partner about the best way to connect.
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00:16:44,720 --> 00:16:47,200
Tell them where you're located and how many users you have.
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00:16:47,200 --> 00:16:49,760
They'll help you choose between Microsoft calling plans,
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00:16:49,760 --> 00:16:52,120
operator connect, or direct routing.
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00:16:52,120 --> 00:16:54,080
You don't need to become an expert on this.
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00:16:54,080 --> 00:16:55,840
A good partner will ask the right questions
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00:16:55,840 --> 00:16:57,280
and give you a recommendation.
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00:16:57,280 --> 00:16:59,560
They'll ask about your current setup and future needs.
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00:16:59,560 --> 00:17:01,080
That's what they're there for.
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00:17:01,080 --> 00:17:02,760
Step three, start small.
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00:17:02,760 --> 00:17:05,080
Don't try to move your entire company at once.
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00:17:05,080 --> 00:17:07,320
Pick a handful of users to pilot your new setup.
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00:17:07,320 --> 00:17:09,440
Set up an auto attendant for your main number.
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00:17:09,440 --> 00:17:10,520
Test it for a week.
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00:17:10,520 --> 00:17:12,560
You'll quickly see how much simpler it is.
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00:17:12,560 --> 00:17:15,360
Your pilot users will tell you what works and what doesn't.
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00:17:15,360 --> 00:17:17,240
Then you can roll out to the rest of the company
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00:17:17,240 --> 00:17:18,080
with confidence.
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00:17:18,080 --> 00:17:20,400
You'll build confidence with each successful rollout.
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00:17:20,400 --> 00:17:21,520
That's the smart way to do it.
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00:17:21,520 --> 00:17:22,400
That's the system.
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00:17:22,400 --> 00:17:25,160
Three ways to connect one app to use them all.
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00:17:25,160 --> 00:17:27,120
If this episode helped you see the big picture,
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00:17:27,120 --> 00:17:29,560
share it with someone who's still stuck with an old desk phone
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00:17:29,560 --> 00:17:31,600
and subscribe for more plain English breakdowns
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00:17:31,600 --> 00:17:32,960
of Microsoft Tech.
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00:17:32,960 --> 00:17:35,320
I'm Mirko Peters from M365FM, and I'll
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00:17:35,320 --> 00:17:37,920
see you in the next episode.
Founder of m365.fm, m365.show and m365con.net
Mirko Peters is a Microsoft 365 expert, content creator, and founder of m365.fm, a platform dedicated to sharing practical insights on modern workplace technologies. His work focuses on Microsoft 365 governance, security, collaboration, and real-world implementation strategies.
Through his podcast and written content, Mirko provides hands-on guidance for IT professionals, architects, and business leaders navigating the complexities of Microsoft 365. He is known for translating complex topics into clear, actionable advice, often highlighting common mistakes and overlooked risks in real-world environments.
With a strong emphasis on community contribution and knowledge sharing, Mirko is actively building a platform that connects experts, shares experiences, and helps organizations get the most out of their Microsoft 365 investments.
