7 Things to Know Before Choosing Microsoft Teams Phone Plans

A finance team budgets $10 per user for Teams Phone. Then the first invoice arrives at nearly $30.

Where did the extra $20 come from?

It is not necessarily a hidden fee or a bad deal. Teams Phone is only one part of the phone system. The license adds business calling features to Microsoft Teams, but you still need a separate connection to the public telephone network to make and receive external calls.

That connection can come through Microsoft Calling Plans, Operator Connect, Teams Phone Mobile, or Direct Routing, depending on your users, carrier, and infrastructure.

In this blog, we explain the key factors to consider before choosing Microsoft Teams Phone plans and help you determine which option is right for your organization.

TL;DR – Quick takeaway 1. Teams Phone is a license, not the entire phone service. You also need a PSTN connectivity option for external calling. 2. Microsoft Calling Plans are a good fit when Microsoft is available as your carrier and your requirements fit its calling plans. 3. Operator Connect is useful when you want PSTN service from a participating carrier without managing an SBC yourself. 4. Direct Routing is a better option when you need to connect legacy PBXs, analog devices, existing carriers, or regional systems that other options don’t support.

What are the factors to consider before choosing Microsoft Teams calling plans

Before choosing a Microsoft Teams Phone plan, you need to understand some key factors to avoid unnecessary costs.

1. Teams Phone requires a separate license

This is the part that catches most buyers. Microsoft unbundled Teams from its enterprise suites. The change hit the European Economic Area and Switzerland in October 2023 and the rest of the world in April 2024.

For new Enterprise customers, Microsoft separates the Teams service from the core E1, E3, and E5 suites. Depending on the plan and calling requirements, you may then need Teams Phone licensing and a PSTN connectivity option. 

Existing customers may continue using their current licensing arrangement under Microsoft’s applicable terms. Check your tenant’s current licensing status before modeling the cost of adding Teams Phone.

Your situation	What you need to buy
New enterprise customer	E1, E3, or E5 without Teams + a standalone Teams license; Teams Phone licensing if users need business calling
Enterprise customer from before April 2024	Existing suite can continue, with Teams Phone added where required
Microsoft 365 Business, up to 300 users	Business suite with Teams + Teams Phone licensing if users need business calling
Frontline workforce	F1 or F3 + Teams Phone Standard for Frontline Workers where required

2. Teams Phone and PSTN connectivity are separate

The connectivity model you choose also determines who manages carriers, phone numbers, routing, and related infrastructure. That can affect both administration effort and the work required during migration.

The Teams Phone license adds Microsoft Teams Phone features for business calling, including: 

• Cloud voicemail
• Auto attendants
• Call queues
• Call forwarding and transfer
• Caller ID

The important point for buyers is that Teams Phone alone does not connect users to external phone numbers. These features help manage business calls, but they don’t let users make or receive calls from external phone numbers.

PSTN connectivity is the other part of the setup. This connects Teams Phone to the public telephone network, allowing users to call mobile phones, landlines, and customers outside your organization. This means the Teams Phone license is only part of the calling cost. 

3. Four ways to connect to the PSTN

Microsoft documents four PSTN connectivity models for Teams Phone: Microsoft Calling Plans, Operator Connect, Teams Phone Mobile, and Direct Routing. Shared Calling is a separate capability for users with limited external calling needs.

Option	How it works	Best fit
Microsoft Calling Plans	Microsoft is your carrier	Small teams, one country
Operator Connect	Your carrier links through Teams admin center	Most mid-sized and multi-country teams
Teams Phone Mobile	Mobile number is integrated with Teams	Field and mobile-first employees
Direct Routing	A certified SBC connects your carrier to Teams	Legacy PBX, analog devices, existing carrier

For users with limited calling needs, Shared Calling can be an alternative to assigning each user a dedicated number and calling plan. It uses a resource account and shared phone number for external calls.

Organizations can also combine connectivity options, such as Operator Connect at headquarters and Direct Routing in a region with specific carrier requirements. For instance, a multinational manufacturer may use Operator Connect where its carrier is supported and Direct Routing where an existing PBX is still required.

This flexibility is important when choosing a Teams Phone solution that can support different connectivity and deployment requirements. 

4. Audio conferencing is different from Teams Phone

Audio Conferencing and Teams Phone serve different purposes. Audio Conferencing lets people join Teams meetings by phone, while Teams Phone provides business calling to and from phone numbers. They are separate licenses for different use cases, so you can purchase either one based on what your users need.

Here’s how the licensing works: 

• E5 includes Audio Conferencing.
• E1 and E3 users need Audio Conferencing separately.
• New E1, E3, and E5 customers do not get Teams Phone included by default.

For example, an E3 user who only needs to join meetings by phone may need Audio Conferencing but not Teams Phone. A sales employee who makes external business calls needs Teams Phone and PSTN connectivity. 

5. Different user types need different plans

License requirements vary by role, device, and calling needs. Match the license to how each user actually works to avoid paying for features they don’t need. 

User type	What they actually need	License
Desk-based knowledge worker	Full calling, voicemail, transfer	Teams Phone Standard plus connectivity
Frontline or shared-device worker	Basic reliable calling	Teams Phone Standard for Frontline Workers
Common area endpoint	Lobby phone, warehouse line	Microsoft Teams Shared Space
Customer-facing agent	Advanced routing, recording, supervisor tools	Teams Phone + certified contact center

Frontline licensing has specific eligibility requirements. A qualifying user must use a primary device with a single screen smaller than 10.9 inches or share a primary work device with other frontline-licensed users. Microsoft Teams Shared Space, previously called Microsoft Teams Shared Devices, is intended for common-area phones and shared devices.

For example, a warehouse employee using a shared device may qualify for a frontline license, while a receptionist using a dedicated office PC would typically need standard Teams Phone licensing.

6. The license price is not the total cost

Microsoft Teams Phone pricing is not limited to the per-user license. PSTN connectivity, number porting, devices, recording, and contact center software can add to the first-year cost. 

Line item	Shape of the cost
Base Teams or Microsoft 365 license	Per user, monthly, already in your budget
Teams Phone Standard	Around $10 per user per month
Operator Connect carrier contract	Carrier-priced
Number porting	One-off per number
Certified desk phones	One-off, roughly $150 to $400 per device
Compliance call recording	Add-on, where required
Contact center platform	Separate license, where required

7. Compliance and emergency calling can affect your choice 

Your licensing choice can also depend on compliance, emergency calling, and data residency requirements. These requirements can limit which connectivity options you can use and increase the risk of choosing a setup that does not meet regulatory or emergency-calling obligations.

• Emergency calling: In the US, Kari’s Law requires direct 911 dialing and central notification, while the RAY BAUM’S Act requires a dispatchable location to be provided with 911 calls, according to FCC requirements.
  
• Call recording: Standard Teams recording may not meet compliance requirements. Businesses that need guaranteed capture, encryption, or long-term retention may need a third-party compliance recording solution.
  
• Data residency: Regulated businesses may need call and recording data stored in specific regions. Confirm the data location and encryption key ownership before choosing a provider.

Which Microsoft Teams voice plan is the right fit for your organization

The right Microsoft Teams Phone plan depends on your organization’s size, locations, existing phone infrastructure, and calling requirements. Here’s a quick guide to help you choose. 

1. Small team, single country, no legacy phone system

Businesses in a single country with no legacy phone system can consider Teams Phone with Microsoft Calling Plans when Calling Plans are available in their region. Microsoft provides the PSTN connection, so you can manage the phone service without coordinating a separate carrier.

The Teams Phone with Calling Plan bundle is a good option when you want one provider for both the Teams Phone license and PSTN service. You manage the phone service through Microsoft rather than coordinating a separate carrier. 

2. Mid-sized team and multinational companies

Teams Phone Standard combined with Operator Connect can be the right option when you want to continue with a participating carrier for PSTN connectivity. Your operator manages the PSTN service and SBC infrastructure, while phone numbers can be managed through the Teams admin center. This avoids the hardware and management requirements associated with running your own SBC. 

3. Direct routing for legacy systems

Direct Routing is a good fit when you need to connect Teams Phone with a legacy PBX, analog devices, or existing telephony infrastructure. It requires a certified SBC, so organizations often work with a Teams Phone provider like Altigen that can handle the carrier connection, deployment, and ongoing management.

For example, a manufacturer with analog paging systems and an existing PBX may use Direct Routing to connect those systems while moving employee calling to Teams. 

4. Large frontline or shared-device workforce

You need to use different licenses based on how employees use Teams: frontline licenses for shift workers, Teams Shared Space for common area endpoints, and full Teams Phone Standard only for desk-based staff.

Using the appropriate license for each user type can prevent you from paying for capabilities that some employees do not need.

5. Customer-facing agents

Teams Phone can handle business calling, but customer-facing teams with advanced routing, compliance recording, and supervisor tools may need a certified Teams contact center solution. 

Final takeaway

Microsoft Teams Phone gives businesses several deployment options. But there isn’t a single Microsoft Teams Phone plan that’s right for every business. The best choice depends on how your employees work, where they’re located, how they connect to customers, and the level of control and compliance your organization requires.

Choosing the right Teams Phone setup depends on your users, locations, existing carrier, and calling requirements. Altigen can help you evaluate the licensing and connectivity options and build a deployment around your existing infrastructure. Contact our experts to discuss your requirements. 

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