What is Microsoft Teams Phone?

Microsoft's overview of Teams Phone describes it as call control and PBX capabilities delivered from the Microsoft 365 cloud. Call control is the part of a phone system that decides where a call goes, including what happens when nobody answers. A PBX has traditionally been equipment in the office or a separate hosted service. Teams Phone puts it in the same platform that already runs the company's chat and meetings.

The core features of the Teams Phone Standard license are cloud voicemail, call forwarding, call transfer, auto attendants, call queues and caller ID, according to the list of Teams add-on licenses. An auto attendant is the menu that greets callers and sends them to the right place. A call queue holds callers until someone in a group is free to answer.

People use all of this from the Teams app on a computer or a mobile phone. It also works on certified desk phones, so a receptionist or a shared office can still have a handset. Administrators set calling policies for the whole organization, for a group or for one user. Teams Phone can run alongside another phone system or a contact center, so a company can move one office or one department first. The path a call takes is covered in how Teams Phone works.

Teams users can already call each other. By default, calls between Teams users in the same organization are handled inside Teams and never reach the public phone network. A colleague can start one by clicking a name in a chat, for example, with no phone number involved.

Teams Phone is what turns that into a phone system. A Teams Enterprise license includes native calling features, and the Teams Phone license adds more, which is how Microsoft's feature page draws the line. The additions are the PBX features above and the right to use a connection to the public phone network.

That right comes from a license. Teams Phone Standard is an add-on to a Teams license, and Microsoft's US list price for it is $10 per user per month, paid yearly. Some larger suites already contain it. Any Microsoft 365 E5 license includes the phone system, which the licensing page still calls the Microsoft 365 Phone System application, the product's older name. Which Teams Phone license you need depends on the plan a user holds today.

A licensed user with nothing else has a phone system that can't dial a landline or a mobile. The connection to the public phone network, or PSTN, is separate from a Teams Phone license. That connection supplies the phone numbers and the access to domestic, international and emergency calling. Microsoft's PSTN connectivity page lists four routes, and they differ in who acts as the phone company.

With a Calling Plan, Microsoft is both the phone system and the phone company. The two can be bought as one bundle, Teams Phone with Calling Plan, or as a Teams Phone Standard license with a Calling Plan license added. The names sound alike, but Teams Phone and a Calling Plan are different things: one is the phone system and the other is Microsoft's calling service. On the other three routes Microsoft provides the phone system and a carrier provides the service behind it.

Atlantech Online shows what that looks like. It is a carrier in the Operator Connect program, and its Operator Connect page says it manages the PSTN calling services and the session border controllers, the devices that join a carrier's network to Teams. The customer's administrator still works in the Teams admin center, where the carrier's numbers are assigned to users. Atlantech lists a flat rate "as low as $3 per user/month" for that service, with unlimited calling in the US and number porting. That figure is a starting price for the carrier's part. Microsoft's licensing is a separate requirement, which a user's existing plan may already meet.

Suppose a company is set up this way and a customer calls its main number. The menu that answers, the queue that holds the call and the voicemail that takes it after hours all run in Microsoft's cloud. The phone number and the calling service that carried the call to Teams come from the carrier. A working Teams Phone deployment is both halves together.

A tenant can use more than one route. Any combination is supported, so a company can put office staff on one carrier and field staff on mobile numbers. We walk through that decision in how to choose a PSTN connectivity option for Teams Phone. What each route adds to the bill is in how much Teams Phone costs.

A phone number in Teams Phone can belong to a person or to a service. A person's number rings that person in Teams. A service number belongs to an auto attendant or a call queue, which is how a company's main line or support line reaches a group of people. A service number can handle hundreds of calls at once, while a user's number handles only a few, according to the setup guide.

Not everyone needs a number of their own. Microsoft offers Shared Calling, in which a group of users makes and receives outside calls through one number attached to an auto attendant. Each of those users still needs a Teams Phone license. The license does not come with a number in either case, which we explain in whether a Teams Phone license includes a phone number.

One limit applies to Teams Phone Mobile. It supports user numbers only. Numbers for auto attendants and call queues come through one of the other three routes.