Microsoft Teams Phone System & Calling Plan: UK Business Guide 2026

Microsoft Teams is used by millions of UK businesses for messaging, video calls, and file sharing. But many don't realise you can also make and receive real phone calls directly inside Teams — replacing your desk phone entirely. This guide explains how it works, what it costs, and whether it's the right choice for your business.

What is Microsoft Teams Phone calling?

Microsoft Teams Phone adds the ability to make and receive calls to and from real phone numbers directly inside the Teams application. When someone dials your business number, it rings in Teams — on your laptop, desktop, or smartphone. You can call any phone number in the world from the same interface you use for Teams meetings and chat.

From the outside, your customers experience a normal business phone call. From the inside, it's all happening within Teams.

Two ways to add calling to Teams

Route 1: Direct Routing (plugin) — no Microsoft Phone licence needed

Direct Routing connects Teams to a third-party voice carrier (like us) via a certified Session Border Controller (SBC). You don't need Microsoft's Phone System licence or Calling Plan — the calling capability is provided by our platform as a plugin that integrates directly with Teams.

Cost: From around £6.60/user/month for the calling capability, on top of your existing Microsoft 365 licence.

Advantages: Lower cost, more flexible call routing, works with your existing Microsoft 365 subscription without adding Microsoft Phone Standard licences.

Route 2: Microsoft Calling Plan (full ecosystem)

Microsoft's own calling solution. You add a Teams Phone Standard licence to each user's Microsoft 365 subscription, then purchase a Calling Plan from Microsoft (or from a certified supplier like us at better rates).

Cost: From £12.30/user/month including 3,000 minutes when licences are supplied by us at annual rates billed monthly.

Advantages: Everything from Microsoft, single vendor, includes 3,000 minutes per user.

Costs in detail

We supply all Microsoft licences at annual rates billed monthly — which is typically cheaper than Microsoft's own monthly billing, with the flexibility of monthly payments.

What you need for Teams calling

• Microsoft 365 subscription — Teams is included in most Microsoft 365 Business plans
• Reliable broadband — Teams calls use your internet connection
• A device with Teams installed — Windows, Mac, iOS or Android
• A calling plan or Direct Routing setup — we handle this

You do not need a new desk phone. Teams calling works on any device that runs Teams — laptop, desktop, tablet, or smartphone. If you want a physical desk phone experience, Teams-certified IP phones are available.

Is Teams calling right for your business?

Teams Phone is an excellent fit for businesses that:

• Already use Microsoft 365 and Teams daily
• Want to reduce the number of apps and platforms they manage
• Have staff who are comfortable working from their laptop or smartphone
• Want calls, meetings, chat, and file sharing all in one place

Teams calling may not be the best fit if:

• You need a traditional reception desk with a physical handset as the primary interface
• You have complex call routing requirements (call centres, ACD queues)
• Your staff aren't comfortable with Teams and you don't want to change that

The genuine benefits of Microsoft Teams calling

Teams calling is not the right choice for every business — but for businesses that are already embedded in the Microsoft 365 ecosystem, the benefits are real and worth understanding properly.

Reduced infrastructure costs

Moving to Teams calling removes the need for expensive on-premises PBX hardware and the ongoing cost of legacy phone lines. There is no physical phone system to maintain, no engineer callouts when hardware fails, and no capital expenditure on server hardware. For businesses already paying for Microsoft 365 licences, adding Teams calling is an incremental cost rather than a wholesale new system purchase.

It is worth being realistic about cost expectations, however. Teams calling costs are usually similar to traditional phone systems — rarely significantly cheaper once all licences, Direct Routing costs and any hardware are factored in. The financial case is usually about consolidation and simplicity rather than dramatic savings.

Single platform for all communication

For businesses that already use Teams for messaging, meetings and file sharing, adding calling creates a genuine "single pane of glass" experience. Users manage calls, chats, video meetings and file sharing within one familiar interface — reducing the time and friction lost switching between separate applications throughout the day.

The Microsoft 365 integration runs deeper than just the Teams app:

• Click-to-call from Outlook — dial any contact directly from your email client without switching applications
• Calendar integration — meetings are automatically scheduled with the right dial-in details, Teams links and participant lists pulled from your calendar
• Document collaboration during calls — share and co-edit documents in real time while on a call, without leaving Teams
• Presence indicators — see a colleague's availability status (Available, Busy, In a meeting, Do not disturb) before making a call, reducing interruptions and missed connections

For businesses where staff spend most of their working day inside Microsoft 365 applications, this level of integration genuinely reduces friction and improves productivity in ways that a separate phone system cannot match.

The honest summary

Teams calling makes most sense when your team already lives in Teams and you want to consolidate communications into one platform. The cost saving versus a traditional system is usually modest — the real benefit is simplicity and integration. If your business has complex call handling needs, or if your team doesn't already use Teams heavily, a dedicated hosted VoIP platform will likely serve you better.

The pitfalls of Microsoft Teams calling — what to watch out for

Teams Phone is an excellent fit for many businesses, but it is not without its weaknesses. Understanding these before you commit will help you avoid the most common implementation mistakes — and decide whether Teams calling is genuinely the right choice or whether a dedicated hosted VoIP platform would serve you better.

Call quality and network optimisation

Teams calling is sensitive to network conditions in a way that surprises many businesses. Echo, latency and dropped calls are common complaints — and in most cases the root cause is not Teams itself but the network it runs on. VoIP traffic needs to be prioritised over general internet traffic (a process called QoS — Quality of Service). Without this, a large file download or a video upload happening in the background can degrade call quality noticeably.

VPN usage is a particular problem. Many businesses route all internet traffic through a VPN, which adds latency and can cause serious call quality issues. Teams calls should ideally bypass the VPN entirely — this requires specific network configuration that many businesses don't realise is needed until they're already experiencing problems.

The bottom line: Teams calling works well on a well-configured network. If your network hasn't been optimised for voice traffic, call quality issues are likely.

Limited PBX features and call centre capability

Teams Phone covers the core features most businesses need — call routing, auto-attendant, voicemail, call queues — but it lacks the depth of a dedicated hosted VoIP platform for more complex requirements:

• Call reporting and analytics — limited compared to dedicated platforms. Real-time wallboards, queue supervisor stats and detailed agent performance reporting require third-party add-ons or are simply unavailable
• Skills-based routing — routing calls to the most appropriate agent based on their skills is not natively supported
• Call queue management — the built-in call queue features are relatively basic compared to specialist contact centre platforms
• Real-time monitoring — supervisors have limited ability to monitor live calls or intervene in queues

If your business has a reception function, a sales team taking inbound calls, or any kind of customer service queue, these limitations are worth taking seriously. Platforms like eve — Enterprise UCaaS include live wallboards, queue supervisor stats and detailed reporting as standard.

Licensing complexity and cost

Microsoft Teams calling has a reputation for licensing complexity that is well-deserved. The base Teams application is included in most Microsoft 365 subscriptions, but adding phone calling requires additional licences — and the options are not straightforward.

The Direct Routing route (via a certified supplier like us) avoids the need for Microsoft's own Phone Standard licence and is typically cheaper. However, even this requires careful management of which users have calling enabled, what numbers are assigned, and how the routing is configured. Changes that would take seconds on a simple hosted VoIP platform can require IT involvement on Teams.

Certified Teams hardware — phones and headsets that are fully compatible with Teams — tends to be significantly more expensive than equivalent hardware for other VoIP platforms. If your business needs physical desk phones, factor this into the total cost comparison.

Direct Routing security — toll fraud risk

When Teams calling is implemented via Direct Routing over the public internet, it introduces a security risk that businesses should be aware of: toll fraud. This is where criminals exploit vulnerabilities in a VoIP system to make large volumes of calls — typically to expensive international numbers — at your expense. Bills of thousands of pounds can accumulate quickly before anyone notices.

A properly configured Direct Routing implementation includes protections against toll fraud — call barring rules, spending limits, geographic restrictions and monitoring. We include these as standard in every Teams calling implementation. However, businesses implementing Teams calling without specialist expertise may not have these protections in place.

Teams calling vs dedicated hosted VoIP — which is right for you?

Teams calling and dedicated hosted VoIP are not in direct competition — they suit different types of business.

Choose Teams calling if: your team already lives in Teams for messaging, meetings and collaboration, you don't have complex call handling requirements, and consolidating into one platform is a priority.

Choose a dedicated hosted VoIP platform if: you need advanced call queue management, live reporting and wallboards, skills-based routing, or simply want a phone system that is straightforward to manage without specialist IT knowledge. Platforms like GoYap, Gamma Horizon and eve — Enterprise UCaaS are purpose-built for business telephony in a way that Teams is not.

We supply both — and will recommend the right option for your specific situation rather than defaulting to one or the other.

Frequently asked questions