Cloud calling natively inside Microsoft 365 — no separate app required
If your organization runs on Microsoft 365, Teams Phone is the cloud PBX you may already be paying for. Add a Teams Phone license to your existing M365 subscription and your Microsoft Teams becomes a full enterprise phone system — with PSTN calling, call queues, auto-attendants, and voicemail, all inside the Teams app your users already live in. No new app to train, no separate login, no third-party UCaaS bill. For Microsoft shops, it's the lowest total-cost path to ditching the on-prem PBX.
Microsoft Teams Phone (formerly Teams Calling) is Microsoft's cloud-based phone system built natively into Microsoft Teams. It extends Teams from a video and messaging platform into a complete UCaaS solution — supporting inbound and outbound PSTN calling, auto-attendants, call queues, voicemail, call recording, and compliance features. PSTN connectivity is delivered through Microsoft Calling Plans (Microsoft as the carrier), Direct Routing (bring your own carrier via SBC), or Operator Connect (certified carrier partners). For organizations already in the M365 ecosystem, Teams Phone eliminates the need for a separate UCaaS platform, phone application, or carrier contract.
Deployment model: Cloud (Microsoft Azure); PSTN via Calling Plans, Direct Routing, or Operator Connect. Pricing model: Add-on license per user on top of M365. Typical price range: $8–$15/user/month (Teams Phone Standard or Premium); Calling Plan rates vary. Pricing is negotiable at volume — Compare Select benchmarks quotes against real transacted deals before you sign.
Calling is built directly into the Teams app — no separate phone app, no additional desktop client. Users place and receive calls from the same interface they use for chat and meetings.
Build IVR menus and call queues entirely in the Teams Admin Center — no separate phone system portal to learn. Supports business hours, holiday schedules, and overflow routing.
Connect your existing SIP carrier or on-prem PBX to Teams Phone via a certified Session Border Controller — preserving existing carrier contracts while moving call control to Teams.
Microsoft-certified carrier partners provision PSTN services directly in the Teams Admin Center — faster provisioning than Direct Routing with less infrastructure to manage.
Integrated compliance call recording (with certified partners), dynamic E911 location services, and full audit trails — meeting regulated industry requirements.
Sim-based calling integration that extends Teams Phone to mobile carrier networks — users can receive work calls on their mobile number through Teams, even without internet.
| Alternative | How it compares |
|---|---|
| RingCentral | RingCentral has broader global PSTN coverage and more mature contact center capabilities. Teams Phone wins for Microsoft shops through lower TCO and native integration. |
| Zoom Phone | Zoom Phone is video-first and has a simpler admin experience. Teams Phone is the natural choice for M365 shops; Zoom Phone wins for Zoom-centric organizations. |
| Cisco Webex Calling | Webex Calling has deeper enterprise telephony features. Teams Phone wins on M365 integration and total cost for Microsoft-centric organizations. |
Teams Phone is included in M365 E5. E3 and Business licenses require a Teams Phone Standard add-on ($8/user/month). Many organizations don't realize they're already entitled — Compare Select will audit your licensing before recommending any purchase.
Calling Plans: Microsoft is your carrier — simplest but higher per-minute rates, limited to select countries. Direct Routing: Your existing SIP carrier connects via an SBC — complex but cost-effective, any country. Operator Connect: Microsoft-certified carrier configures in the admin portal — middle ground. Compare Select will recommend the right model for your carrier situation and geographies.
Teams Phone handles call queues, IVR, and basic routing well. For a full contact center (workforce management, omnichannel, supervisor dashboards), you'll want a certified CCaaS solution on top — like Dynamics 365 Customer Service, Five9, or Genesys. Compare Select will scope whether Teams Phone covers your needs or whether CCaaS is required.
Compare Microsoft Teams Phone against every alternative in our VoIP & UCaaS comparison, or browse the full vendor directory. Ready for pricing? Talk to a Compare Select advisor — our guidance is free and vendor-neutral.