Teams Phone works by moving the job of a traditional phone system into the Microsoft 365 cloud, where a call-control service acts as the private branch exchange (PBX) that controls each call from the moment someone dials to the moment the call ends, all inside the Teams apps people already use.[1] Calls between two people in the same organization stay on the internet as encrypted data and never reach the public switched telephone network (PSTN), so internal calling carries no carrier toll.[1] Reaching an outside landline or mobile number takes two separate pieces: a Teams Phone license that switches on the calling features, and a PSTN connection that supplies real phone numbers and the path to the outside world.[1][2] That PSTN link can come from a Microsoft Calling Plan, an Operator Connect carrier, Teams Phone Mobile, or Direct Routing through your own session border controller, and one organization can use more than one at once.[2] After a user is licensed, given a number, and voice enabled, the cloud service sets up the call while the audio itself travels over the most direct network path available, secured with SRTP.[4][5]
\n","summary":"Teams Phone turns Microsoft 365 into a cloud phone system: a call-control service in the cloud acts as the PBX, internal calls run over the internet, and a Teams Phone license plus a PSTN connection (Microsoft Calling Plan, Operator Connect, Teams Phone Mobile, or Direct Routing) let users dial real phone numbers. Admins assign numbers, voice enable users, and build auto attendants and call queues, while call audio flows over the most direct path it can find, encrypted with SRTP.","publishedAt":"2026-07-18T03:47:27.534","verifiedAt":"2026-07-17T00:00:00","editorialStatus":"APPROVED","lastReviewedAt":"2026-07-17T00:00:00","nextReviewDueAt":"2026-10-17T00:00:00","templateVersion":"v2","aliases":["How does Microsoft Teams Phone work?","How does Teams Phone System work?","How does calling work in Microsoft Teams?","How do Teams Phone calls connect to the PSTN?","How does Teams Phone route calls?","What happens when you make a call in Teams Phone?","How does Teams Phone connect to phone numbers?","Teams Phone call flow explained","How does Microsoft Teams make and receive phone calls?","How does the Teams cloud PBX work?","How does Teams Phone handle external calls?","How does voice enablement work in Teams Phone?"],"confidenceScore":93,"confidenceLabel":"High","canonicalUrl":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"contributorOrganizationProfile":{"entityId":"ec39deab-44fe-48d8-9029-fefe993ab85a","legalName":null,"description":null,"websiteUrl":null,"imageUrl":null,"slogan":null,"subtitle":null,"facts":[],"coiNote":null,"foundingDate":null,"numberOfEmployeesText":null,"contactPoint":null,"address":null,"headquartersText":null,"organizationType":null},"contributorPerson":{"slug":"answerstack-editorial-team","displayName":"AnswerStack Editorial Team"},"sections":[{"id":"131c2f33-890d-48c9-8913-c5552809bdaf","sectionKey":"high_level","sectionType":"markdown_section","heading":"How does Teams Phone work at a high level?","introMarkdown":"Teams Phone works by running your phone system as a cloud service inside Microsoft 365 rather than on a box in a wiring closet. The call-control software that a traditional private branch exchange (PBX) would provide lives in Microsoft's cloud, so calls get set up, answered, transferred, parked, and routed inside the Teams desktop, web, and mobile apps or on a certified desk phone.[1] Microsoft describes it plainly as the technology for enabling call control and PBX capabilities in the Microsoft 365 cloud, and an independent explainer frames it the same way.[1][12]\n\n### A call takes one of two paths\n\nBy default, a call between two people in the same organization is handled natively within Teams and never reaches the public switched telephone network, which removes the operator toll on internal calls.[1] A call to or from a regular phone number is different, because it has to cross from the Microsoft cloud onto the PSTN through a carrier connection. Which path a given call takes depends on whether the other party is inside your Teams organization or out on the phone network.\n\n### Two things have to line up before external calls work\n\nA Teams Phone license and a PSTN connection are deliberately kept separate, and you need both to dial the outside world. The license entitles a user to the enhanced calling features and to access a PSTN solution, while the PSTN solution supplies the phone numbers and the actual access to domestic, international, and emergency calling.[1][3] Administrators sit on top of this with voice policies that control calling features at the org, group, and user level.[1]","introHtml":"Teams Phone works by running your phone system as a cloud service inside Microsoft 365 rather than on a box in a wiring closet. The call-control software that a traditional private branch exchange (PBX) would provide lives in Microsoft's cloud, so calls get set up, answered, transferred, parked, and routed inside the Teams desktop, web, and mobile apps or on a certified desk phone.[1] Microsoft describes it plainly as the technology for enabling call control and PBX capabilities in the Microsoft 365 cloud, and an independent explainer frames it the same way.[1][12]
\nBy default, a call between two people in the same organization is handled natively within Teams and never reaches the public switched telephone network, which removes the operator toll on internal calls.[1] A call to or from a regular phone number is different, because it has to cross from the Microsoft cloud onto the PSTN through a carrier connection. Which path a given call takes depends on whether the other party is inside your Teams organization or out on the phone network.
\nA Teams Phone license and a PSTN connection are deliberately kept separate, and you need both to dial the outside world. The license entitles a user to the enhanced calling features and to access a PSTN solution, while the PSTN solution supplies the phone numbers and the actual access to domestic, international, and emergency calling.[1][3] Administrators sit on top of this with voice policies that control calling features at the org, group, and user level.[1]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":0},{"id":"47715eeb-5f07-457c-ba69-328c41d60642","sectionKey":"moving_parts_table","sectionType":"table_section","heading":"What are the moving parts that make Teams Phone work?","introMarkdown":"On top of the cloud call-control service, Teams Phone is really five pieces you assemble, from the calling license down to the handset in someone's hand. Each one gets a full explanation below the table.","introHtml":"On top of the cloud call-control service, Teams Phone is really five pieces you assemble, from the calling license down to the handset in someone's hand. Each one gets a full explanation below the table.
\n","outroMarkdown":"None of these works alone. A license with no PSTN connection cannot call outside, and a PSTN connection with no assigned number and no voice enablement cannot place a call, so the pieces below are worth treating as a set.[2][4]","outroHtml":"None of these works alone. A license with no PSTN connection cannot call outside, and a PSTN connection with no assigned number and no voice enablement cannot place a call, so the pieces below are worth treating as a set.[2][4]
\n","contentJson":{"rows":[{"cells":["Teams Phone license","Switches on PSTN dialing and enterprise calling features for a user [3]","Buy and assign a license per user [4]"]},{"cells":["PSTN connection","Bridges the cloud to real phone numbers and the outside network [2]","Pick Calling Plan, Operator Connect, Teams Phone Mobile, or Direct Routing [2]"]},{"cells":["Phone numbers and voice enablement","Give a user a dialable number and clearance to use it","Assign a number and turn on Enterprise Voice [4]"]},{"cells":["Call routing and voice apps","Decide where inbound and outbound calls go [6][7]","Build voice routing policies, auto attendants, and call queues [6][7]"]},{"cells":["Clients and devices","Where people actually place and answer calls [1]","Sign in on Teams apps, certified phones, or existing SIP devices [8]"]}],"columns":["Piece","What it does","What you set up"]},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":1},{"id":"3d904974-cb27-46c6-9d3e-4f91adc8ff8e","sectionKey":"teams_phone_license","sectionType":"markdown_section","heading":"The Teams Phone license","introMarkdown":"The Teams Phone license is the switch that turns a chat-and-meetings user into a phone-system user. A base Teams or Microsoft 365 Enterprise license already includes native calling, meaning Teams-to-Teams calls, voicemail, and video, but the Teams Phone license is what adds the PBX features and the ability to dial PSTN numbers.[3] With it, a user gets call park, shared-line delegation, external caller ID drawn from the company directory, group call pickup, and the ability to be part of an auto attendant or call queue.[3] The license entitles the user to those enhanced capabilities and to access a PSTN solution, but it does not include any calling minutes by itself.[1][3] Some subscriptions already contain it, so a buyer on a plan that bundles Teams Phone may only need to add a PSTN connection rather than the license. On its own the license still cannot reach the outside world without the connection described next.[3][4]","introHtml":"The Teams Phone license is the switch that turns a chat-and-meetings user into a phone-system user. A base Teams or Microsoft 365 Enterprise license already includes native calling, meaning Teams-to-Teams calls, voicemail, and video, but the Teams Phone license is what adds the PBX features and the ability to dial PSTN numbers.[3] With it, a user gets call park, shared-line delegation, external caller ID drawn from the company directory, group call pickup, and the ability to be part of an auto attendant or call queue.[3] The license entitles the user to those enhanced capabilities and to access a PSTN solution, but it does not include any calling minutes by itself.[1][3] Some subscriptions already contain it, so a buyer on a plan that bundles Teams Phone may only need to add a PSTN connection rather than the license. On its own the license still cannot reach the outside world without the connection described next.[3][4]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":2},{"id":"3fb04ade-5254-481f-806c-755ccec2a34e","sectionKey":"pstn_connection","sectionType":"markdown_section","heading":"The PSTN connection that reaches real phone numbers","introMarkdown":"The PSTN connection is what lets a Teams call cross from the Microsoft cloud onto the ordinary phone network, and Microsoft keeps it separate from the license on purpose.[1][2] A PSTN solution gives your tenant its phone numbers and its access to domestic, international, and emergency calling, and it has to be in place before any licensed user can make or receive outside calls.[2] There are four ways to supply it. A Microsoft Calling Plan makes Microsoft your carrier under a 99.999% reliability service level agreement; Operator Connect brings a certified third-party landline carrier that has already built the connection into Teams; Teams Phone Mobile ties a carrier SIM number to the Teams identity; and Direct Routing connects a carrier of your choice through a certified session border controller (SBC) that you or a partner run.[2] One tenant can mix these, for example a Calling Plan for headquarters and Direct Routing for a region where Microsoft does not sell numbers.[2] The choice changes who your carrier is and how much infrastructure you manage, not whether you need a per-user license.[2]","introHtml":"The PSTN connection is what lets a Teams call cross from the Microsoft cloud onto the ordinary phone network, and Microsoft keeps it separate from the license on purpose.[1][2] A PSTN solution gives your tenant its phone numbers and its access to domestic, international, and emergency calling, and it has to be in place before any licensed user can make or receive outside calls.[2] There are four ways to supply it. A Microsoft Calling Plan makes Microsoft your carrier under a 99.999% reliability service level agreement; Operator Connect brings a certified third-party landline carrier that has already built the connection into Teams; Teams Phone Mobile ties a carrier SIM number to the Teams identity; and Direct Routing connects a carrier of your choice through a certified session border controller (SBC) that you or a partner run.[2] One tenant can mix these, for example a Calling Plan for headquarters and Direct Routing for a region where Microsoft does not sell numbers.[2] The choice changes who your carrier is and how much infrastructure you manage, not whether you need a per-user license.[2]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":3},{"id":"ebe5b973-2e70-4988-8daf-9d4957c37c1d","sectionKey":"numbers_and_voice_enablement","sectionType":"markdown_section","heading":"Phone numbers and voice enablement","introMarkdown":"A licensed user still cannot place a call until two more things happen: a phone number gets assigned, and the account is voice enabled.[4] You acquire numbers through whichever PSTN option you chose, then assign a user number to a person or a service number to a resource account.[4] Service numbers matter for shared lines: a single service number can handle hundreds of calls at once, while a personal user number handles only a few, so a main line or a support line is built on a resource account.[4] Voice enabling is the second half: in the Teams admin center you turn Enterprise Voice on for the user, or you set the EnterpriseVoiceEnabled parameter with the Set-CsPhoneNumberAssignment PowerShell cmdlet.[4] Until that flag is on, the license and the number are present but the account is not cleared to use the PSTN. For large migrations, Shared Calling lets you move big groups onto Teams Phone and let them make calls before every individual number is assigned.[4]","introHtml":"A licensed user still cannot place a call until two more things happen: a phone number gets assigned, and the account is voice enabled.[4] You acquire numbers through whichever PSTN option you chose, then assign a user number to a person or a service number to a resource account.[4] Service numbers matter for shared lines: a single service number can handle hundreds of calls at once, while a personal user number handles only a few, so a main line or a support line is built on a resource account.[4] Voice enabling is the second half: in the Teams admin center you turn Enterprise Voice on for the user, or you set the EnterpriseVoiceEnabled parameter with the Set-CsPhoneNumberAssignment PowerShell cmdlet.[4] Until that flag is on, the license and the number are present but the account is not cleared to use the PSTN. For large migrations, Shared Calling lets you move big groups onto Teams Phone and let them make calls before every individual number is assigned.[4]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":4},{"id":"09211656-a87e-4528-bcc8-314c28dfa372","sectionKey":"call_routing","sectionType":"markdown_section","heading":"How calls get routed to the right place","introMarkdown":"Routing is the logic that decides where a call goes, and Teams Phone handles it in two layers: system-level voice routing for outbound PSTN calls, and voice apps for inbound calls.[6][7] On Direct Routing, an outbound call is matched against voice routing policies, which contain PSTN usages, which in turn hold voice routes; each route pairs a dialed-number pattern with one or more SBCs and sends a matching call to the right gateway, with backup SBCs tried if the first is unavailable.[6] With a Calling Plan, that routing is handled automatically by Microsoft.[6]\n\n### Auto attendants and call queues\n\nInbound calls to a main number usually land on a voice app rather than a person. An auto attendant answers with a menu and directs the caller to a person, a department, a call queue, an external number, or voicemail, and callers move through it by voice command or keypad, with separate handling for business hours, after hours, and holidays.[7] A call queue is the waiting room: callers hold with a greeting and music while the service looks for the next available agent.[7] Both run on resource accounts with their own service numbers rather than on a user's license.[7]","introHtml":"Routing is the logic that decides where a call goes, and Teams Phone handles it in two layers: system-level voice routing for outbound PSTN calls, and voice apps for inbound calls.[6][7] On Direct Routing, an outbound call is matched against voice routing policies, which contain PSTN usages, which in turn hold voice routes; each route pairs a dialed-number pattern with one or more SBCs and sends a matching call to the right gateway, with backup SBCs tried if the first is unavailable.[6] With a Calling Plan, that routing is handled automatically by Microsoft.[6]
\nInbound calls to a main number usually land on a voice app rather than a person. An auto attendant answers with a menu and directs the caller to a person, a department, a call queue, an external number, or voicemail, and callers move through it by voice command or keypad, with separate handling for business hours, after hours, and holidays.[7] A call queue is the waiting room: callers hold with a greeting and music while the service looks for the next available agent.[7] Both run on resource accounts with their own service numbers rather than on a user's license.[7]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":5},{"id":"d2bc7972-0945-42a5-a968-f32da5392fec","sectionKey":"clients_and_devices","sectionType":"markdown_section","heading":"Where people place and answer calls","introMarkdown":"The endpoint is wherever the user actually talks: the Teams app on a computer or phone, a certified desk phone, or in many cases an existing SIP handset.[1][8] Because the calling logic is in the cloud, one phone number can ring across every signed-in endpoint at once, and a user can move a live call from a laptop to the mobile app without dropping it.[3] In practice, the Microsoft 365 integration also brings small conveniences like click-to-call straight from an Outlook contact, so dialing happens from the tools people already work in.[3][13] For organizations that already own phones, SIP Gateway lets compatible SIP devices from vendors such as Poly, Yealink, Cisco, and AudioCodes sign in to Teams and make and receive calls, so existing hardware keeps working.[8] A SIP device used this way acts as a Teams endpoint and can reach the PSTN, other SIP devices, and Teams users, though the user still needs a phone number with PSTN calling enabled.[8] The same cloud service backs all of these endpoints, so you can fit the device to the role, from a headset for a remote agent to a common-area phone in a lobby.[3][8]","introHtml":"The endpoint is wherever the user actually talks: the Teams app on a computer or phone, a certified desk phone, or in many cases an existing SIP handset.[1][8] Because the calling logic is in the cloud, one phone number can ring across every signed-in endpoint at once, and a user can move a live call from a laptop to the mobile app without dropping it.[3] In practice, the Microsoft 365 integration also brings small conveniences like click-to-call straight from an Outlook contact, so dialing happens from the tools people already work in.[3][13] For organizations that already own phones, SIP Gateway lets compatible SIP devices from vendors such as Poly, Yealink, Cisco, and AudioCodes sign in to Teams and make and receive calls, so existing hardware keeps working.[8] A SIP device used this way acts as a Teams endpoint and can reach the PSTN, other SIP devices, and Teams users, though the user still needs a phone number with PSTN calling enabled.[8] The same cloud service backs all of these endpoints, so you can fit the device to the role, from a headset for a remote agent to a common-area phone in a lobby.[3][8]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":6},{"id":"4cf1fdfc-b14e-4b8c-a401-53ef3698e290","sectionKey":"network_travel","sectionType":"markdown_section","heading":"How does a Teams Phone call travel across the network?","introMarkdown":"Once the cloud service has set up a call, the two things moving between endpoints are signaling and media, and they take different paths.[5] Signaling is the control channel that starts the call and carries instructions; it mostly uses HTTPS-based interfaces and always goes to the closest Microsoft 365 server to the user, and it uses SIP where the connection reaches a session border controller.[5] Media is the actual audio, carried in Real-time Transport Protocol packets and secured with SRTP so the payload is encrypted.[5]\n\n### Media takes the most direct path it can\n\nFor a call between two people, the media tries to take the most direct route available.[5] Teams uses standard Interactive Connectivity Establishment (ICE) procedures: each endpoint gathers candidate addresses, the two sides run connectivity checks, and the best working path wins, favoring UDP because it is the better transport for real-time audio.[5] When a direct path is blocked, for example between an office user and someone on the open internet, a Transport Relay inside Microsoft 365 relays the media instead.[5] With Direct Routing, media bypass can keep the audio flowing straight between the client and the on-premises SBC rather than routing it up through the cloud, which shortens the path for a PSTN call.[3][5]","introHtml":"Once the cloud service has set up a call, the two things moving between endpoints are signaling and media, and they take different paths.[5] Signaling is the control channel that starts the call and carries instructions; it mostly uses HTTPS-based interfaces and always goes to the closest Microsoft 365 server to the user, and it uses SIP where the connection reaches a session border controller.[5] Media is the actual audio, carried in Real-time Transport Protocol packets and secured with SRTP so the payload is encrypted.[5]
\nFor a call between two people, the media tries to take the most direct route available.[5] Teams uses standard Interactive Connectivity Establishment (ICE) procedures: each endpoint gathers candidate addresses, the two sides run connectivity checks, and the best working path wins, favoring UDP because it is the better transport for real-time audio.[5] When a direct path is blocked, for example between an office user and someone on the open internet, a Transport Relay inside Microsoft 365 relays the media instead.[5] With Direct Routing, media bypass can keep the audio flowing straight between the client and the on-premises SBC rather than routing it up through the cloud, which shortens the path for a PSTN call.[3][5]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":7},{"id":"2fb40c4a-2c01-47d3-992f-a7a3df7e462a","sectionKey":"emergency_calling","sectionType":"markdown_section","heading":"How does emergency calling work?","introMarkdown":"Emergency calling works by attaching a validated physical address to a user or a location so that responders receive a usable dispatchable address when someone dials for help.[9] Microsoft recommends creating addresses with the map search feature in the Teams admin center, which validates the address and attaches the geo codes that some countries use to route the call to the correct public safety answering point.[9] A registered address is the static location assigned to a user, which fits people at a fixed desk.[9] Dynamic emergency calling goes further by detecting the current network location of the Teams client and routing both the call and any security-desk notification based on where the person actually is, and it is supported across all four PSTN options, though Direct Routing needs extra configuration.[9] How much of this you set up yourself depends on the connection: with a Microsoft Calling Plan the emergency screening service and registered address are included, while other options hand more of the responsibility to the carrier or your own team.[2][9] For staff working from home, enabling location sharing lets a remote emergency call carry a current address.[9] United States deployments also carry regulatory emergency-calling obligations that vary by PSTN option.[2][9]","introHtml":"Emergency calling works by attaching a validated physical address to a user or a location so that responders receive a usable dispatchable address when someone dials for help.[9] Microsoft recommends creating addresses with the map search feature in the Teams admin center, which validates the address and attaches the geo codes that some countries use to route the call to the correct public safety answering point.[9] A registered address is the static location assigned to a user, which fits people at a fixed desk.[9] Dynamic emergency calling goes further by detecting the current network location of the Teams client and routing both the call and any security-desk notification based on where the person actually is, and it is supported across all four PSTN options, though Direct Routing needs extra configuration.[9] How much of this you set up yourself depends on the connection: with a Microsoft Calling Plan the emergency screening service and registered address are included, while other options hand more of the responsibility to the carrier or your own team.[2][9] For staff working from home, enabling location sharing lets a remote emergency call carry a current address.[9] United States deployments also carry regulatory emergency-calling obligations that vary by PSTN option.[2][9]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":8},{"id":"d9355c7b-ee60-47b1-8d22-59397bc49c12","sectionKey":"trade_offs","sectionType":"markdown_section","heading":"Trade-offs and limits worth planning around","introMarkdown":"Teams Phone depends on your internet, your licensing choices, and correct configuration, and each of those shapes a limit worth planning around.\n\n### The license is not the whole bill\n\nA Teams Phone Standard license lists at $10.00 per user per month paid yearly, but on its own it cannot call the outside world, so a working deployment also needs a PSTN option: a bundle such as Teams Phone with Calling Plan runs about $17 per user per month, and independent pricing guides current to April 2026 match those figures and note you still need a base Teams or Microsoft 365 license underneath.[10][11] Budgeting for the phone license alone understates the real cost.\n\n### It runs on data, power, and the network\n\nBecause calls travel as encrypted media over IP, a call needs a working internet connection and power at the user's location, unlike a legacy analog line that drew power from the phone company.[5] Quality tracks the network, so a congested link or a VPN sitting in the media path can degrade a call.[5]\n\n### Some routing has to be built and maintained\n\nDirect Routing gives you the most control, but the number patterns, voice routes, and SBC itself have to be configured and kept current, which asks more of your team than a Microsoft-managed Calling Plan does.[2][6]","introHtml":"Teams Phone depends on your internet, your licensing choices, and correct configuration, and each of those shapes a limit worth planning around.
\nA Teams Phone Standard license lists at $10.00 per user per month paid yearly, but on its own it cannot call the outside world, so a working deployment also needs a PSTN option: a bundle such as Teams Phone with Calling Plan runs about $17 per user per month, and independent pricing guides current to April 2026 match those figures and note you still need a base Teams or Microsoft 365 license underneath.[10][11] Budgeting for the phone license alone understates the real cost.
\nBecause calls travel as encrypted media over IP, a call needs a working internet connection and power at the user's location, unlike a legacy analog line that drew power from the phone company.[5] Quality tracks the network, so a congested link or a VPN sitting in the media path can degrade a call.[5]
\nDirect Routing gives you the most control, but the number patterns, voice routes, and SBC itself have to be configured and kept current, which asks more of your team than a Microsoft-managed Calling Plan does.[2][6]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":9},{"id":"613aa92b-4848-445d-ae8a-48bd4101f6a4","sectionKey":"what_it_is_not","sectionType":"markdown_section","heading":"What Teams Phone is not","introMarkdown":"Teams Phone is the calling layer of Microsoft 365, not a standalone app or a phone carrier. A few common mix-ups are worth clearing up.\n\n### It is not the same as basic Teams calling\n\nEvery Teams user can already call another Teams user over the internet without Teams Phone.[3] The Teams Phone license is the separate piece that adds PBX features and, with a PSTN connection, the ability to dial real phone numbers.[1][3]\n\n### It is not a phone carrier on its own\n\nTeams Phone provides the phone system, not the numbers or the line to the outside network. Those come from a PSTN option, and with three of the four options a third party rather than Microsoft is your actual carrier.[2]\n\n### It is not tied to one type of phone\n\nThe service backs Teams apps, certified desk phones, and compatible existing SIP devices through SIP Gateway, so moving to it does not require throwing out every handset you own.[8]\n\n### It is not a guarantee of your call quality\n\nMicrosoft's 99.999% service level agreement covers the Calling Plan service, not your local internet, so a working deployment still depends on the network between the endpoints.[2][10]","introHtml":"Teams Phone is the calling layer of Microsoft 365, not a standalone app or a phone carrier. A few common mix-ups are worth clearing up.
\nEvery Teams user can already call another Teams user over the internet without Teams Phone.[3] The Teams Phone license is the separate piece that adds PBX features and, with a PSTN connection, the ability to dial real phone numbers.[1][3]
\nTeams Phone provides the phone system, not the numbers or the line to the outside network. Those come from a PSTN option, and with three of the four options a third party rather than Microsoft is your actual carrier.[2]
\nThe service backs Teams apps, certified desk phones, and compatible existing SIP devices through SIP Gateway, so moving to it does not require throwing out every handset you own.[8]
\nMicrosoft's 99.999% service level agreement covers the Calling Plan service, not your local internet, so a working deployment still depends on the network between the endpoints.[2][10]
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":10},{"id":"7dce6093-1833-4d05-8a89-3e8806ddea5c","sectionKey":"contributor_perspective","sectionType":"markdown_section","heading":"How this answer was researched","introMarkdown":"The mechanics described here come primarily from Microsoft's own Teams documentation on Microsoft Learn, which is the authoritative source for how Teams Phone is licensed, how it connects to the PSTN, how calls are routed, and how media travels across the network.[1][2][3][4][5][6][7][8][9] Pricing was checked against Microsoft's published product page and corroborated with an independent pricing guide current to April 2026, and the high-level definition was cross-checked against an independent industry explainer.[10][11][12] Microsoft changes Teams licensing, pricing, and feature availability often, so the dollar figures, license names, and feature splits here reflect what the cited pages stated on the verification date rather than a permanent guarantee. Practitioners who design, deploy, or support Teams Phone at scale are welcome to suggest corrections or additions, which are checked against Microsoft's primary documentation before any update is made.","introHtml":"The mechanics described here come primarily from Microsoft's own Teams documentation on Microsoft Learn, which is the authoritative source for how Teams Phone is licensed, how it connects to the PSTN, how calls are routed, and how media travels across the network.[1][2][3][4][5][6][7][8][9] Pricing was checked against Microsoft's published product page and corroborated with an independent pricing guide current to April 2026, and the high-level definition was cross-checked against an independent industry explainer.[10][11][12] Microsoft changes Teams licensing, pricing, and feature availability often, so the dollar figures, license names, and feature splits here reflect what the cited pages stated on the verification date rather than a permanent guarantee. Practitioners who design, deploy, or support Teams Phone at scale are welcome to suggest corrections or additions, which are checked against Microsoft's primary documentation before any update is made.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":"This answer was written and reviewed by the AnswerStack Editorial Team, which has no commercial stake in the products, companies, or methods discussed. Every claim is cited inline and verified on the dates shown.","noteHtml":"This answer was written and reviewed by the AnswerStack Editorial Team, which has no commercial stake in the products, companies, or methods discussed. Every claim is cited inline and verified on the dates shown.
\n","sortOrder":11}],"citations":[{"title":"What is Teams Phone","url":"https://learn.microsoft.com/en-us/microsoftteams/what-is-phone-system-in-office-365","excerpt":"By default, calls between Teams users in your organization are handled natively within Teams, and never go to the Public Switched Telephone Network (PSTN).","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Teams Phone as Microsoft's call control and PBX capability in the Microsoft 365 cloud; internal Teams calls stay native and off the PSTN with no toll; license plus PSTN solution both required; works in all Teams clients and certified devices; admin voice policies at org, group, and user level","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Microsoft - PSTN connectivity options","url":"https://learn.microsoft.com/en-us/microsoftteams/pstn-connectivity","excerpt":"In order to use PSTN telephony services with Teams Phone, the user account must be licensed with the Teams Phone application and also be equipped with a PSTN solution from your PSTN service provider of choice.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"User must be licensed with Teams Phone AND equipped with a PSTN solution; the four connectivity models (Microsoft Calling Plan, Operator Connect, Teams Phone Mobile, Direct Routing); 99.999% Calling Plan SLA; SBC for Direct Routing; a tenant can combine options; emergency-calling responsibilities di","domain":"learn.microsoft.com","publisherName":"Microsoft"},{"title":"Teams Phone features - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/here-s-what-you-get-with-phone-system","excerpt":"The Microsoft Teams Enterprise license includes native calling features, and the Teams Phone license unlocks even more features.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Native Teams calling (included with a Teams Enterprise license) versus the extra features a Teams Phone license adds: PSTN dialing, call park, call delegation, group call pickup, external caller ID, dial plans, media bypass; move a call in progress to another device","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Set up Teams Phone in your organization - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/setting-up-your-phone-system","excerpt":"For each user who uses Teams Phone, you must assign a Teams Phone license to that user. In addition to licensing, the users must be 'voice enabled.'","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Provisioning steps: assign a Teams Phone license, choose a PSTN option, get and assign user and service numbers, voice enable users (Enterprise Voice / Set-CsPhoneNumberAssignment); service numbers handle hundreds of simultaneous calls; Shared Calling for phased migration","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Microsoft Teams call flows - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/microsoft-teams-online-call-flows","excerpt":"Media traffic for peer-to-peer calls takes the most direct route that is available... RTP flow is secured using SRTP, in which only the payload is encrypted.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Signaling versus media paths; media takes the most direct route via ICE and prefers UDP; Transport Relay used when a direct path is blocked; RTP media secured with SRTP; Direct Routing media bypass between client and SBC","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Configure call routing for Direct Routing - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/direct-routing-voice-routing","excerpt":"Teams Phone has a routing mechanism that allows a call to be sent to a specific Session Border Controller (SBC) based on: The called number pattern.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Outbound routing on Direct Routing: voice routing policies contain PSTN usages that hold voice routes; each route pairs a called-number pattern with one or more SBCs, with backup SBCs; Calling Plan outbound routing is automatic","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Plan - Overview of Teams Phone Agent, Auto Attendant, and Call Queue - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/aa-cq-plan-overview","excerpt":"The primary purpose of an Auto Attendant is to direct a caller to an appropriate person or department based on the caller's input to the provided menu options.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Auto attendants route callers by menu to a person, department, call queue, external number, or voicemail, with business-hours/after-hours/holiday handling and keypad or voice navigation; call queues hold callers with greeting and music while finding the next available agent; both run on resource acc","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Plan SIP Gateway - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/devices/sip-gateway-plan","excerpt":"SIP Gateway lets your organization use any compatible SIP device with Microsoft Teams to preserve your investments in SIP devices.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"SIP Gateway lets compatible existing SIP devices (Poly, Yealink, Cisco, AudioCodes and others) sign in to Teams and make and receive PSTN, SIP, and Teams calls; the SIP device acts as a Teams endpoint; users still need a phone number with PSTN calling enabled","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Plan and manage emergency calling - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/what-are-emergency-locations-addresses-and-call-routing","excerpt":"Dynamic emergency calling for Microsoft Calling Plans, Operator Connect, Teams Phone Mobile, and Direct Routing provides the capability to configure and route emergency calls and notify security personnel based on the current location of the Teams client.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Emergency addresses validated with map search and geo codes; registered (static) address versus dynamic emergency calling based on the Teams client's current network location; supported across all four PSTN options with extra config for Direct Routing; security desk notifications; remote-worker loca","domain":"learn.microsoft.com","publisherName":"Microsoft Learn"},{"title":"Microsoft Teams Phone","url":"https://www.microsoft.com/en-us/microsoft-teams/microsoft-teams-phone","excerpt":"Teams Phone Standard $10.00 user/month, paid yearly.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-17T00:00:00","supportsText":"Teams Phone Standard listed at $10.00 per user per month paid yearly; Teams Phone with Calling Plan at $17.00 per user per month; 99.999% uptime SLA; make and receive voice and video calls over PSTN or the internet and transfer calls between devices","domain":"microsoft.com","publisherName":"Microsoft"},{"title":"Microsoft Teams Phone System Pricing & Plans: Full Guide for 2026","url":"https://www.cloudtalk.io/blog/microsoft-teams-phone-system-pricing/","excerpt":"Teams Phone Standard: $10.00/user per month for cloud PBX features. Standard does not include any calling minutes. Teams Phone with Calling Plan: $17 per user/month includes 3,000 domestic outbound minutes.","quoteText":null,"sourceRole":"INDEPENDENT","verifiedAt":"2026-07-17T00:00:00","supportsText":"Independent pricing guide updated April 30, 2026 corroborating Teams Phone Standard at $10/user/month with no calling minutes and Teams Phone with Calling Plan at $17/user/month, plus the note that a base Teams or Microsoft 365 license is still required","domain":"cloudtalk.io","publisherName":"CloudTalk"},{"title":"What is the Microsoft Teams Phone System?","url":"https://www.uctoday.com/unified-communications/what-is-the-microsoft-teams-phone-system/","excerpt":"'Phone System' by Microsoft is the technology available for companies to enable call control and PBX (Private Branch Exchange) capabilities in the Microsoft 365 cloud.","quoteText":null,"sourceRole":"INDEPENDENT","verifiedAt":"2026-07-17T00:00:00","supportsText":"Independent explainer describing Teams Phone as call control and PBX in the Microsoft 365 cloud, internal calls handled internally with no PSTN connection, and external calls via Calling Plan, Operator Connect, or Direct Routing","domain":"uctoday.com","publisherName":"UC Today"},{"title":"7 Microsoft Teams Phone System Features Your Business Needs","url":"https://www.atlantech.net/blog/microsoft-teams-phone-system","excerpt":"Because Teams Phone is natively integrated with Microsoft 365, businesses can click-to-call directly from Outlook contacts.","quoteText":null,"sourceRole":"SUPPORTING","verifiedAt":"2026-07-17T00:00:00","supportsText":"Business-facing view of Teams Phone as a cloud phone system integrated with Microsoft 365, including click-to-call from Outlook contacts and turning a range of devices into business phones; corroborated by [3] and [10]","domain":"atlantech.net","publisherName":"Atlantech Online"}],"revisions":[],"relatedAnswers":[{"id":"8317c7a7-d7a6-4a7c-8428-441b19177913","slug":"how-do-i-choose-a-pstn-connectivity-option-for-teams-phone","question":"How do I choose a PSTN connectivity option for Teams Phone?","publishedAt":"2026-07-18T03:43:05.249","confidenceScore":92,"confidenceLabel":"High","industry":{"id":"ff619d7c-d7d7-485e-a05a-53fba07f33ed","slug":"telecommunications","label":"Telecommunications","description":"Business voice, fiber, UCaaS, and network services"},"topic":{"slug":"teams-phone","label":"Teams Phone","description":"Microsoft Teams Phone: licensing, PSTN connectivity, calling plans, and setup.","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Teams Phone needs a PSTN connection on top of the phone license, and Microsoft offers four ways to provide it: a Microsoft Calling Plan, Operator Connect, Teams Phone Mobile, and Direct Routing. The right pick depends on whether Calling Plans are sold in your countries, whether you want to keep a current carrier, how much infrastructure you want to run, and any emergency-calling or continuity needs. A single tenant can combine options by region or by type of worker.","url":"/q/how-do-i-choose-a-pstn-connectivity-option-for-teams-phone"},{"id":"67fc8518-2dba-4c3b-8029-0a39c59afd28","slug":"what-is-the-difference-between-teams-phone-and-a-calling-plan","question":"What is the difference between Teams Phone and a Calling Plan?","publishedAt":"2026-07-18T03:41:44.225","confidenceScore":95,"confidenceLabel":"High","industry":{"id":"ff619d7c-d7d7-485e-a05a-53fba07f33ed","slug":"telecommunications","label":"Telecommunications","description":"Business voice, fiber, UCaaS, and network services"},"topic":{"slug":"teams-phone","label":"Teams Phone","description":"Microsoft Teams Phone: licensing, PSTN connectivity, calling plans, and setup.","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Teams Phone and a Microsoft Calling Plan are two different purchases that most organizations buy together. Teams Phone is the cloud phone system, the per-user license that adds PBX features like auto attendants, call queues, and PSTN dialing. A Calling Plan is one of four ways to connect that phone system to the public phone network; it makes Microsoft your carrier and supplies the numbers and minutes. Internal Teams calls need neither, and a Calling Plan cannot work without a Teams Phone license underneath it.","url":"/q/what-is-the-difference-between-teams-phone-and-a-calling-plan"},{"id":"dc0dd213-a7d5-4cd3-95e3-5457b9308922","slug":"what-teams-phone-license-do-i-need","question":"What Teams Phone license do I need?","publishedAt":"2026-07-18T03:41:33.762","confidenceScore":93,"confidenceLabel":"High","industry":{"id":"ff619d7c-d7d7-485e-a05a-53fba07f33ed","slug":"telecommunications","label":"Telecommunications","description":"Business voice, fiber, UCaaS, and network services"},"topic":{"slug":"teams-phone","label":"Teams Phone","description":"Microsoft Teams Phone: licensing, PSTN connectivity, calling plans, and setup.","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Teams Phone licensing comes in layers. Every user needs a base Microsoft 365 or Teams subscription, then a Teams Phone license, then a PSTN connection for external calls. E5 plans already include Teams Phone; lower tiers add Teams Phone Standard at about $10 per user per month. A Microsoft Calling Plan, Operator Connect, Teams Phone Mobile, or Direct Routing supplies the outside line, and only the Microsoft Calling Plan route needs its own extra license.","url":"/q/what-teams-phone-license-do-i-need"},{"id":"856a2341-d0c5-4496-a8d2-d97388060c1c","slug":"how-much-does-teams-phone-cost","question":"How much does Teams Phone cost?","publishedAt":"2026-07-18T03:40:01.318","confidenceScore":92,"confidenceLabel":"High","industry":{"id":"ff619d7c-d7d7-485e-a05a-53fba07f33ed","slug":"telecommunications","label":"Telecommunications","description":"Business voice, fiber, UCaaS, and network services"},"topic":{"slug":"teams-phone","label":"Teams Phone","description":"Microsoft Teams Phone: licensing, PSTN connectivity, calling plans, and setup.","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Teams Phone Standard is $10 per user per month for cloud PBX features with no calling minutes. Microsoft's bundled Calling Plans run $17 (3,000 pooled domestic minutes) or $34 (adds international). Microsoft 365 E5 already includes the phone-system license. Once you add PSTN connectivity, resource accounts, and a base Microsoft 365 license, independent estimates put the real all-in cost near $25 to $35 per user per month.","url":"/q/how-much-does-teams-phone-cost"}],"contributorStats":{"verifiedAnswers":224,"openDisputes":0},"schemaJson":{"@context":"https://schema.org","@type":"Question","name":"How does Teams Phone work?","text":"How does Teams Phone work?","url":"https://www.answerstack.io/q/how-does-teams-phone-work","answerCount":1,"datePublished":"2026-07-18T03:47:27.534","author":{"@type":"Person","name":"AnswerStack Editorial Team","worksFor":{"@type":"Organization","name":"AnswerStack"},"url":"https://www.answerstack.io/contributors/answer-stack"},"about":[{"@type":"Thing","name":"Teams Phone"},{"@type":"Thing","name":"Telecommunications"}],"acceptedAnswer":{"@type":"Answer","text":"Teams Phone works by moving the job of a traditional phone system into the Microsoft 365 cloud, where a call-control service acts as the private branch exchange (PBX) that controls each call from the moment someone dials to the moment the call ends, all inside the Teams apps people already use.[1] Calls between two people in the same organization stay on the internet as encrypted data and never reach the public switched telephone network (PSTN), so internal calling carries no carrier toll.[1] Reaching an outside landline or mobile number takes two separate pieces: a Teams Phone license that switches on the calling features, and a PSTN connection that supplies real phone numbers and the path to the outside world.[1][2] That PSTN link can come from a Microsoft Calling Plan, an Operator Connect carrier, Teams Phone Mobile, or Direct Routing through your own session border controller, and one organization can use more than one at once.[2] After a user is licensed, given a number, and voice enabled, the cloud service sets up the call while the audio itself travels over the most direct network path available, secured with SRTP.[4][5]","url":"https://www.answerstack.io/q/how-does-teams-phone-work","upvoteCount":0,"datePublished":"2026-07-18T03:47:27.534","dateModified":"2026-07-17T00:00:00","author":{"@type":"Person","name":"AnswerStack Editorial Team","worksFor":{"@type":"Organization","name":"AnswerStack"},"url":"https://www.answerstack.io/contributors/answer-stack"},"citation":[{"@type":"CreativeWork","name":"What is Teams Phone","url":"https://learn.microsoft.com/en-us/microsoftteams/what-is-phone-system-in-office-365"},{"@type":"CreativeWork","name":"Microsoft - PSTN connectivity options","url":"https://learn.microsoft.com/en-us/microsoftteams/pstn-connectivity"},{"@type":"CreativeWork","name":"Teams Phone features - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/here-s-what-you-get-with-phone-system"},{"@type":"CreativeWork","name":"Set up Teams Phone in your organization - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/setting-up-your-phone-system"},{"@type":"CreativeWork","name":"Microsoft Teams call flows - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/microsoft-teams-online-call-flows"},{"@type":"CreativeWork","name":"Configure call routing for Direct Routing - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/direct-routing-voice-routing"},{"@type":"CreativeWork","name":"Plan - Overview of Teams Phone Agent, Auto Attendant, and Call Queue - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/aa-cq-plan-overview"},{"@type":"CreativeWork","name":"Plan SIP Gateway - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/devices/sip-gateway-plan"},{"@type":"CreativeWork","name":"Plan and manage emergency calling - Microsoft Teams","url":"https://learn.microsoft.com/en-us/microsoftteams/what-are-emergency-locations-addresses-and-call-routing"},{"@type":"CreativeWork","name":"Microsoft Teams Phone","url":"https://www.microsoft.com/en-us/microsoft-teams/microsoft-teams-phone"},{"@type":"CreativeWork","name":"Microsoft Teams Phone System Pricing & Plans: Full Guide for 2026","url":"https://www.cloudtalk.io/blog/microsoft-teams-phone-system-pricing/"},{"@type":"CreativeWork","name":"What is the Microsoft Teams Phone System?","url":"https://www.uctoday.com/unified-communications/what-is-the-microsoft-teams-phone-system/"},{"@type":"CreativeWork","name":"7 Microsoft Teams Phone System Features Your Business Needs","url":"https://www.atlantech.net/blog/microsoft-teams-phone-system"}]}}}