Microsoft Teams Phone System 2026: Pricing, Setup & Best Fit Quick answer
Microsoft Teams Phone turns Microsoft Teams into a business phone system, allowing UK businesses to make and receive external calls through the Teams app using business phone numbers, so is usually best for businesses that already use Microsoft 365 and want calls, meetings, chat and collaboration in one place.
However, Teams Phone is not automatically the cheapest or simplest VoIP option. The total cost depends on your Microsoft 365 licences, Teams Phone licence, PSTN calling option, setup route, support, call volumes, desk phones, contact centre requirements and whether you use Calling Plans, Operator Connect or Direct Routing.
Most UK businesses should compare Teams Phone against hosted VoIP before choosing.
Teams Phone can be a strong fit if you:
already use Microsoft 365
want calls inside Teams
have remote or hybrid workers
want to reduce separate phone system tools
need basic-to-mid call handling
want to move away from landlines before the PSTN switch-off
Hosted VoIP will be better if you:
want a simpler standalone phone system
need traditional PBX-style support
need easier setup and onboarding
run a call-heavy sales or support team
do not already use Microsoft 365
want clear per-user VoIP pricing
Compare Microsoft Teams Phone quotes and setup options before committing.
Free quotes • No obligation • Compare Teams Phone, hosted VoIP and SIP options
Contents
What is Microsoft Teams Phone?
Microsoft Teams Phone pricing
Operator Connect
Benefits of Microsoft Teams
Downsides of Microsoft Teams
Microsoft Teams Decision Making Guide
Our Verdict on Microsoft Teams
How do we work?
Transparent, impartial, and data‑driven reviews made by a team of expert humans, never AI generated – here’s exactly how Compare Your Business Costs helps you find the best deals from trusted UK providers: click here
Authored by: Ally Cox (Business Technology & B2B Services Specialist 10+ Years’ Experience)
Reviewed by: James Ward (Telecoms Specialist, 12+ Years Experience)
Last Updated: July 2026
Microsoft teams phone at a glance
Category
Microsoft Teams Phone summary
Best for
Microsoft 365 users, hybrid teams and businesses wanting calls inside Teams
Typical total cost
Around £12–£30+ per user/month depending on licences, calling and setup
Main setup options
Calling Plans, Operator Connect, Direct Routing and Teams Phone Mobile
Best SME option
Usually Calling Plans or Operator Connect
Best complex setup option
Direct Routing
Works on
Desktop, mobile, browser, Teams-certified desk phones and headsets
Replaces landlines?
Yes, when set up with PSTN calling
Replaces a PBX?
Yes, for many businesses, but feature depth depends on setup
Good for contact centres?
Sometimes, but advanced teams may need add-ons or a specialist provider
Main risk
Pricing and setup can become more complex than expected
Best alternative
Hosted VoIP, Cloud PBX, SIP trunking or UCaaS provider
Need Microsoft Teams Phone for your business? This quote service is best for UK businesses that want to compare:
Microsoft Teams Phone
Teams Phone setup costs
Microsoft Calling Plans
Operator Connect providers
Direct Routing providers
Teams Phone Mobile
Microsoft 365 phone system options
Teams-compatible VoIP providers
hosted VoIP alternatives
SIP trunking for Teams
Teams desk phones
call queues and auto attendants
Teams Phone migration before the PSTN switch-off
Key takeaways
Microsoft Teams Phone lets businesses make and receive external calls inside Microsoft Teams.
It can replace a traditional PBX for many UK businesses.
Teams Phone works best for businesses already using Microsoft 365.
The total cost is layered: Microsoft 365 licence, Teams Phone licence, calling setup, support and optional hardware.
Microsoft says Teams Phone can connect to the PSTN through Calling Plans, Operator Connect, Teams Phone Mobile or Direct Routing.
Microsoft says its UK/Canada domestic calling plan includes a phone number and 3,000 outbound domestic calling minutes, with prices excluding VAT.
Calling Plans are usually simplest for small teams.
Operator Connect is often a practical option for SMEs that want a telecoms provider to manage PSTN calling.
Direct Routing is usually better for complex setups, existing telecoms estates or larger organisations.
Teams Phone is not always cheaper than hosted VoIP once setup, support and calling are included.
Call quality depends on broadband, device setup, network configuration and support.
Businesses moving from landlines should plan ahead of the January 2027 PSTN switch-off.
Comparing Teams Phone against hosted VoIP can help avoid overpaying or choosing the wrong setup.
Compare Teams Phone, Operator Connect and hosted VoIP quotes before deciding.
What is Microsoft Teams Phone? Microsoft Teams Phone is Microsoft’s cloud PBX capability for Teams. and using it you can:
Make/receive external calls using Teams (desktop, mobile, or desk phone)
Use UK geographic/non-geographic numbers
Set up call handling features like auto attendant, call queues, and call forwarding (feature depth varies by setup/add-ons)
In plain English:
H ow Microsoft Teams Phone pricing worksMicrosoft Teams Phone pricing can feel confusing because there is not always one single cost.
The total cost usually has several layers.
Cost layer What it means
Microsoft 365 licence
Your base Microsoft subscription
Teams Phone licence
Adds cloud phone system functionality
PSTN calling
Lets you call external landlines and mobiles
Setup route
Calling Plans, Operator Connect, Direct Routing or Teams Phone Mobile
Support partner
Optional but often useful for setup and management
Desk phones/headsets
Optional hardware for users
Number porting
Moving existing business numbers into the new setup
Call queues/auto attendants
Included or configured depending on setup
Contact centre add-ons
Needed for more advanced sales/support teams
Connectivity
Broadband, leased line or backup connection if required
This is why Teams Phone can look cheap at first, then become more expensive once you add calling, setup and support.
Microsoft Teams Phone pricing UK 2026 Most UK businesses should budget around £12 to £30+ per user per month for a complete Teams Phone setup.
Very simple setups may cost less if the business already has the right Microsoft 365 licences.
More complex setups can cost more if you need Direct Routing, Teams-certified devices, call recording, compliance features, contact centre tools or specialist support.
Cost item
Typical cost guide
Notes
Microsoft 365 licence
£5-£20+ per user/month
Teams Phone add-on
Around £6-£12 per user/month
Adds phone system functionality
Calling Plans / PSTN calling
£5-£15+ per user/month
Depends on calling route and usage
Operator Connect
Quote-based
Telecoms provider handles PSTN side
Direct Routing
Quote-based
More technical and usually partner-led
Setup
£0-£500+
Depends on users, porting and configuration
Desk phones
£50-£250+ each
Optional
Headsets
£20-£150+ each
Optional
Contact centre add-ons
£30-£100+ per user/agent
Operator Connect vs Direct Routing vs Calling Plans (which should you choose?)
Option Best for Pros Trade-offs
Calling Plans Simple setups & small teams
One vendor experience, straightforward
Can be less flexible on carrier choice/costs for some businesses
Operator Connect Most SMEs wanting “managed but not complex”
Carrier handles PSTN side, easier than Direct Routing, good for UK number porting
You’re still dependent on your chosen operator’s packages/support
Direct Routing Businesses needing maximum control/customisation
Use your preferred carrier, support legacy PBX scenarios, advanced routing options
More technical (SBC setup), usually needs a specialist partner
Our practical take: Operator Connect unless they have an existing telecoms estate that makes Direct Routing worthwhile.
Which Teams Phone setup should you choose?
Business type Best Teams Phone route Why
1-5 users
Calling Plan or Operator Connect
5-50 users
Operator Connect
Good balance of management and telecoms support
50+ users
Operator Connect or Direct Routing
Depends on complexity and support needs
Existing PBX user
Direct Routing or SIP comparison
May allow staged migration
Microsoft 365-heavy business
Teams Phone
Keeps calling inside Teams
Call centre team
Teams Phone plus contact centre add-on, or alternative provider
Standard Teams Phone may not be enough
Multi-site business
Operator Connect or Direct Routing
Supports more planned routing and resilience
Cost-focused SME
Compare Teams Phone vs hosted VoIP
Hosted VoIP may be cheaper or simpler
Microsoft Teams Phone vs hosted VoIP This is the decision many UK businesses actually need to make.
Feature Microsoft Teams Phone Hosted VoIP
Best for
Businesses already using Microsoft 365
SMEs wanting a standalone phone system
Main advantage
Calls inside Teams
Simpler traditional phone system experience
Pricing
Layered licences and calling costs
Usually clearer per-user pricing
Setup
Can be simple or complex depending on route
Apps
Uses Teams app
Desk phones
Teams-certified devices may be needed
Broad VoIP handset support
Call queues
Available
Auto attendant
Available
CRM integration
Depends on setup/add-ons
Contact centre features
Often needs extra tools
Available through specialist VoIP/CCaaS providers
Support
Microsoft, operator or partner depending on setup
Usually telecoms provider support
Best fit
Microsoft-led businesses
Businesses wanting easier phone-system support
Which is better?
Teams Phone is better if your business already uses Microsoft 365 and wants calling inside Teams.
Hosted VoIP is better if you want a simpler phone system, clearer telecoms support or a provider-led setup.
The safest option is to compare both before choosing.
Who Microsoft Teams Phone is best for Teams Phone is usually a strong fit if you:
Already use Microsoft 365 and want to reduce tool sprawl
Have hybrid/remote staff who want calls on laptop/mobile
Want a modern cloud PBX without deploying a separate hosted PBX platform
Need basic-to-mid call handling (queues/auto attendants) and can add features if needed
Who Microsoft Teams Phone is not ideal for You may want a dedicated hosted PBX or UCaaS platform if you:
Run a contact-centre-heavy environment and need deep routing, workforce tools and reporting out of the box
Need very advanced telephony features without add-ons/integrations
Don’t use Microsoft 365 at all (licensing stack can feel heavy)
Downsides to Consider
Pricing can feel complex (multiple layers)
Call features may be limited vs dedicated VoIP
Requires strong internet for best performance
Advanced features often need add-ons
Call Quality Checklist To get the best from Teams Phone:
✔ Use wired or high-quality Wi-Fi
✔ Ensure sufficient bandwidth
✔ Set up QoS on your network
✔ Use business-grade broadband
✔ Consider 4G/5G failover
👉 Poor setup = poor call quality (not the platform itself)
Microsoft Teams Phone setup checklist Before setting up Teams Phone, check:
Do you already use Microsoft 365?
Which Microsoft 365 licences do you have?
Do you need Teams Phone Standard?
Do you need Calling Plans, Operator Connect or Direct Routing?
Do you want to keep existing numbers?
How many users need external calling?
Do all users need phone licences?
Do you need call queues?
Do you need auto attendants?
Do you need call recording?
Do you need desk phones?
Do you need Teams-certified devices?
Do you need contact centre tools?
Do you need CRM integration?
Is your broadband suitable for VoIP?
Do you need a backup connection?
Who will support the setup?
How will staff be trained?
A clear setup plan helps avoid cost creep.
Hidden costs to watch for Microsoft Teams Phone can be good value, but businesses should check the full cost before switching.
Hidden or overlooked costs can include:
Microsoft 365 licence upgrades
Teams Phone licences
Calling Plans or operator costs
Direct Routing setup
Session Border Controller costs
specialist partner support
number porting
Teams-certified desk phones
headsets
call recording
contact centre add-ons
CRM integration
user training
admin time
broadband upgrades
backup connectivity
support contract
VAT
Is Microsoft Teams Phone Worth It? Microsoft Teams Phone is worth it if your business already uses Microsoft 365 and wants to bring external calling into Teams.
The biggest value usually comes from:
reducing separate communication tools
supporting remote and hybrid staff
using one app for calls, meetings and chat
moving away from landlines
simplifying collaboration
adding cloud-based call control
avoiding a separate phone system interface
It isn’t going to be worth it if you only need a simple, standalone phone system and do not already use Microsoft 365.
It will also be less suitable if you need advanced contact centre features without extra integrations.
Bottom line
Teams Phone can be excellent for Microsoft 365 businesses, but it is not automatically the best VoIP system for every company.
Compare Teams Phone, hosted VoIP, SIP trunking and UCaaS before deciding.
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FAQs Is Teams Phone the same as Microsoft Teams?
No. Microsoft Teams is the collaboration app for chat, meetings and internal communication. Teams Phone adds external business calling so you can make and receive calls to landlines and mobiles.
What is Microsoft Teams Phone used for?
Microsoft Teams Phone is used to turn Teams into a business phone system. It can support business numbers, external calling, voicemail, call queues, auto attendants and call routing.
How much does Microsoft Teams Phone cost in the UK?
Many businesses should budget around £12 to £30+ per user per month once Teams Phone licensing, PSTN calling, setup and support are included. Exact costs depend on your Microsoft licences and calling setup.
Does Microsoft Teams Phone include calls?
Not automatically in every setup. External calls require PSTN connectivity through Microsoft Calling Plans, Operator Connect, Teams Phone Mobile or Direct Routing.
What are Microsoft Calling Plans?
Calling Plans are Microsoft’s own PSTN calling option. Microsoft says its UK/Canada domestic calling plan includes a phone number and 3,000 outbound domestic calling minutes, with prices excluding VAT.
What is Operator Connect?
Operator Connect lets an approved telecoms operator provide PSTN calling for Teams Phone. It is often a practical option for SMEs that want provider-led calling, porting and support.
What is Direct Routing?
Direct Routing connects Teams Phone to a chosen carrier or SIP provider through specialist routing infrastructure. It gives more control but is more technical.
Which is better: Calling Plans, Operator Connect or Direct Routing?
Calling Plans are usually simplest for small teams. Operator Connect is often practical for SMEs. Direct Routing is usually best for complex, multi-site or larger organisations.
Is Microsoft Teams Phone good for small businesses?
Yes, if the business already uses Microsoft 365 and wants calls inside Teams. Small businesses that do not use Microsoft 365 may find hosted VoIP simpler.
Is Microsoft Teams Phone good for remote working?
Yes. Teams Phone works across desktop, mobile and supported devices, making it useful for hybrid and remote workers.
Can I keep my business number with Teams Phone?
Yes, in most cases. Number porting is available, but the process depends on your chosen calling route and provider.
Do I need a VoIP provider for Teams Phone?
Sometimes. If you use Microsoft Calling Plans, Microsoft handles PSTN calling. If you use Operator Connect or Direct Routing, you will work with an operator, VoIP provider or specialist partner.
Is Teams Phone better than hosted VoIP?
It depends. Teams Phone is better for Microsoft 365 businesses that want calling inside Teams. Hosted VoIP may be better for businesses wanting simpler telecoms support and clearer phone system pricing.
Does Teams Phone replace a PBX?
Yes, Teams Phone can replace a traditional PBX for many businesses, but some complex telephony setups may still need Direct Routing, contact centre add-ons or specialist configuration.
Does Microsoft Teams Phone support call queues?
Yes. Microsoft Teams Phone can support call queues and auto attendants, but they need to be set up correctly.
Can Teams Phone be used for a call centre?
It can support some sales and support use cases, but businesses with complex contact centre needs may need extra tools or a specialist contact centre provider.
What internet speed do I need for Teams Phone?
Teams Phone does not usually need huge bandwidth per call, but it does need stable internet with low latency, low jitter and low packet loss.
Will the PSTN switch-off affect Microsoft Teams Phone?
Yes, indirectly. Businesses moving away from PSTN, ISDN or traditional landlines may choose Teams Phone as a digital replacement before the January 2027 switch-off.
Should I compare Teams Phone quotes?
Yes. Comparing quotes helps you check the full cost of licences, calling, setup, support, number porting, hardware and hosted VoIP alternatives.
Our Verdict Microsoft Teams Phone is one of the best choices for UK businesses already using Microsoft 365, offering a scalable, flexible, and cost-effective phone system built into a familiar platform.
However, it is not always the simplest or cheapest choice.
The final cost depends on your Microsoft licences, calling route, setup support, call features, devices, number porting and contract terms.
For some businesses, hosted VoIP will be easier and clearer.
For others, Operator Connect or Direct Routing will make Teams Phone a strong long-term setup!!
Final recommendation : compare Microsoft Teams Phone against hosted VoIP and SIP options before deciding.
Compare Microsoft Teams Phone quotes and see whether your business could save up to 40%.
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Hi, I’m Ally Cox , a senior copywriter and blogger at CompareYourBusinessCosts.co.uk, the UK’s trusted platform for comparing business services.over a decade of experience in the B2B sector, I specialise in simplifying complex topics like leased lines, VoIP, business energy, HR and payroll solutions, accounting software, and EPOS systems .HR, copywriting, and business operations- from clocking-in systems to card machines and office technology .informed, confident decisions when choosing products and services that improve efficiency and save money.
