What is the difference between Teams Phone and a Calling Plan?

Take an office that runs its own phone equipment. A PBX in the building handles extensions, transfers and voicemail, and lines from a phone company connect that PBX to everyone else. Teams keeps the same two parts and moves both to the cloud.

Microsoft's add-on licensing page describes Teams Phone Standard as a hosted telephone service with PBX capabilities. It names cloud voicemail, call forwarding, call transfer, auto attendants, call queues and caller ID. The same page describes a Calling Plan as an add-on to Teams Phone for calls to the PSTN, the public switched telephone network that landlines and mobiles are on. With a Calling Plan, it says, "Microsoft is your PSTN carrier."

The dependency runs one way. A Calling Plan is an add-on to Teams Phone, and Microsoft's Calling Plans page says an account needs Teams Phone before a Calling Plan can be added to it. Teams Phone works without a Calling Plan as long as some other carrier connects it to the phone network. Microsoft's Teams Phone licensing guide says that if you use an operator other than Microsoft, Microsoft requires no further license, because you pay that operator for the calling.

Calls between Teams users in the same organization normally involve no carrier. Microsoft's Teams Phone overview says those calls are handled inside Teams and never reach the PSTN. The difference between the two licenses starts to matter when someone has to call a landline or a mobile, or a customer has to dial in.

Microsoft sells the two parts as one license and as two. On its US price list, Teams Phone Standard is $10.00 per user per month. Teams Phone with Calling Plan is $17.00 per user per month and includes 3,000 outbound domestic minutes a month for a US user. A third option at $13.00 per user per month pairs the phone system with pay-as-you-go calling, so outgoing calls are billed by the minute. All three prices are for an annual subscription paid yearly, and all three require a separate Teams license.

The Calling Plans page describes both ways to buy. You can take the bundle, or you can take Teams Phone and add a Calling Plan as a second license. The second way matters for accounts that already have the phone system. Suppose some of your people have Microsoft 365 E5. Microsoft's licensing guide says E5 includes the phone system, so those accounts don't need Teams Phone Standard. If Microsoft is going to be their carrier, they add a Calling Plan license by itself. The bundle would pay for a phone system they already have.

Microsoft suggests the pay-as-you-go plan for users with low or variable outgoing call volume. Which combination costs least for a given group depends on how much those people call, and we add up the cases in how much Teams Phone costs.

A Calling Plan is the part that behaves like a phone bill. Microsoft lists three: Domestic, International and Pay-As-You-Go. All three include unlimited incoming minutes. They differ in which outgoing calls they cover and whether those calls come out of included minutes or are charged by use.

Included minutes are pooled across users in the same country who hold the same plan. Microsoft's example is 100 US users on the Domestic plan. Each is allocated 3,000 minutes a month, so the group shares 300,000 a month. Calls beyond the pool are billed per minute. Teams Phone has no equivalent, because the phone system license is a flat entitlement with no minutes attached.

Calling Plans are also sold by country. Where Microsoft doesn't sell them, a Teams Phone license still works with another carrier, which is why a Calling Plan isn't required for Teams Phone.

Atlantech Online's Operator Connect service shows the same division from the carrier's side. Operator Connect is Microsoft's program for carriers that have already connected their networks to Teams. On its Operator Connect page, Atlantech says it manages the PSTN calling services and the session border controllers, the equipment that sits between a carrier's network and Teams. It publishes a flat rate "as low as $3 per user/month" and lists unlimited calling in the US, number porting and support with it. That figure is a starting rate, and the page offers a quote for each organization.

That $3 is for the carrier's side, which is the job a Calling Plan would otherwise do. The phone system still comes from Microsoft, whichever PSTN connectivity option carries the calls. Each user needs Teams Phone, from the $10.00 license or from a suite that includes it.

To compare a Calling Plan with an operator's quote fairly, put the two on the same footing. Microsoft's $17.00 bundle caps included outbound minutes. Its price list says the calling portion includes required US communications taxes and fees, while sales tax on the phone system portion is charged separately. An operator's quote has to state its own calling allowance and its own taxes before the two figures mean the same thing.

The two licenses also attach to different kinds of accounts. Microsoft's licensing guide describes Shared Calling, where a group of users make and receive outside calls through one number that belongs to a resource account. Each of those users still needs a Teams Phone license. None of them needs a number or a Calling Plan of their own. If the shared number comes from Microsoft, the guide says the resource account needs a pay-as-you-go Calling Plan.

Auto attendants and call queues are licensed in a similar way. The guide says to license them with a Teams Phone Resource Account license, which goes on the resource account and not on a person.

A company set up this way holds more phone system licenses than it has phone numbers. The phone system is licensed to each person who handles calls and to the resource accounts behind its auto attendants and call queues. In the cases above, a Calling Plan goes on a user with their own Microsoft number or on the account that holds a shared Microsoft number.