Microsoft Teams- Should it be your company’s next phone system?

Microsoft Teams usage has skyrocketed due to the explosion of remote/hybrid work, and companies have recognized the importance of having dependable video conferencing plus a robust and reliable business phone system.

Many employees find the Teams application an essential tool for collaboration, chat, internal calls, and virtual meetings. But there’s still a significant feature that most companies would love to see at their users’ fingertips: the ability to make outbound calls to public switched telephone network (PSTN) lines- this includes landlines or mobile devices.

Our firm was rarely asked about using Teams for external calling a couple of years ago, but today most clients ask about adding external calling to Teams, if the Teams application is already in place and being used for other forms of collaboration, i.e, video and internal messaging/chat

Today when an organization begins to consider modernizing its phone system, the technology will likely be cloud-based, also referred to as UcaaS (unified communications as a Service). There are many UcaaS providers in the market, and they have been providing services and evolving their product for many years. Common brands  are: RingCentral, Vonage, 8X8, Nextiva, Zoom, and Cisco/WebEx.

A successful decision occurs, when the capability of the procured solution aligns well with the company’s requirements, so an inventory of your company’s requirements should be the first piece of information gathered. Regional locations, and specific departments all have their own unique requirements.

Enabling Microsoft Teams for Private Branch Exchange (PBX) functionality and calls to the Public Switched Telephone Network (PSTN), aka External Calling

With the Teams subscription, Microsoft doesn’t use the feature name “Phone System” as most people would expect. Microsoft uses the term “phone system,” to describe a basic set of features and calling capabilities, but it’s limited to calls and features amongst users within your organization that have Teams, i.e, internal calling.  For “Phone System” to truly be capable of replacing your current premises or cloud-based phone system, the PBX functionality and PSTN calling add-on options need to be added to Teams’ “Phone System,” and there are various methods for doing this.

The Building Blocks to Enable Teams for Private Branch Exchange (PBX) functionality and External (PSTN) calling

In Microsoft documentation, this process is referred to as connecting “Phone System” to the Public Switched Telephone Network (PSTN).

The Microsoft “Phone System” license is required and is an add-on for Microsoft 365 and Office 365 licenses E1 and E3; is included with the E5 license.  As of June 2023, the “Phone System” add-on license is $8.00 per.  The license can also be purchased bundled with the Microsoft Calling Plan license, if available in your location. This article does not address the requirements for organizations using Microsoft government licenses.

The next component, and arguably the most significant one, is choosing the method your organization will connect to the PSTN for external calling. Your options are:

  • Microsoft Calling Plan. An all-in-the-cloud solution with Microsoft as your PSTN carrier. If you choose Microsoft Calling Plan as your connectivity option, and you have a choice of Calling Plan options, including Domestic, International, and Pay-as-you-go plans. Domestic Calling Plan includes 3000 minutes for US, and UK and 1200 minutes for the rest of world.
  • Operator Connect. If your existing carrier participates in the Microsoft Operator Connect program, they can manage PSTN calling for you. Partners that currently offer this service can be found here: Microsoft 365 & Security for Partners – Operator Directory
  • Teams Phone Mobile. If your existing carrier participates in the Microsoft Teams Phone Mobile program, they can manage the service for using SIM-enabled mobile phone numbers with Teams.
  • Direct Routing. This option lets you use your own PSTN carrier by connecting your SBCs to Phone System. All the large UcaaS providers such as RingCentral, Vonage, 8X8, have built direct routing into Microsoft.
  • Plug-in module. Vendors such as RingCentral and Vonage offer a free plug-in that is downloaded from the MS gallery, and is available at no-charge, and doesn’t require any additional MS licensing, as mentioned above. This is a great option, because it offers the power of very experienced providers.
  • Physical Phones. If the organization needs to deploy physical phones than you must procure a device specifically designed to work with Teams, and your options can be found here: Business Desk Phones with Displays | Teams devices (

User Environments for Microsoft Teams

Through our experience working with a broad range of businesses, we have come to some conclusions on the user environment where Teams- External Calling is and ideal versus less than ideal fit.

Ideal Microsoft Teams User Environment:

  • Every phone location is paired with a MS user license.
  • Countries requiring external calling is supported by Microsoft
  • Majority of users will be using headsets, rather than handsets
  • All user computers are equipped with microphones & speakers, or an interface for a headset
  • Features and integration options are available to meet your company’s requirements

Less than Ideal Microsoft Teams User Environment:

  • A large quantity of phones are not paired with a MS user license
    • Typically these are common area phones, or phones in manufacturing areas
    • Phones not paired with MS user license can not communicate with Teams users
  • Countries requiring external calling is Not supported by Microsoft
  • Majority of users will continue to use physical phones
  • Advanced Contact Center requirements

Final Summary

Decisions for a business communications technology are normally long-term commitments, so understanding all of your supplier and technology options, and how they compare with each other is vital to making the best decision for your company’s short and long-term needs.

The team of advisors at BroadReach Technology Advisors, LLC offers the opportunity to explore a broad range of technology and vendor options through our partner relationships, and in-depth industry expertise that ensures successful outcomes.

About Broadreach Technology Advisors, LLC

Broadreach Technology Advisors, LLC is Rochester, NY based firm that provides technology consultant and advisory services. The firm is a technology broker that represents over 100 suppliers, and also provides implementation and project management expertise.  We support a diverse range of clients for their domestic, and global technology requirements.  Contact Information: Anthony Rotoli, 585-672-5400,