Teams Phone can replace most office phone systems, with a few exceptions

The short answer

Yes, for most offices. Microsoft Teams Phone gives each user a real phone number that rings in the Teams app on their computer and mobile, or on a desk phone, with the features of a traditional phone system: voicemail, transfers, call forwarding, auto attendants and call queues. If your staff already live in Microsoft 365, it removes a separate phone vendor and app.

It is not included in Microsoft 365 Business Basic, Standard or Premium. Each user who needs a phone number needs a Teams Phone Standard add-on license plus a way to connect to the public phone network. You can also keep your existing numbers by porting them. It is a weaker fit for call centers with heavy reporting needs and for analog lines such as fax machines, alarm panels and elevator phones.

What you need to license

Microsoft’s licensing documentation separates the phone system from the phone line.

• Teams Phone Standard is the add-on that turns Teams into a phone system. It provides voicemail, call forwarding, transfer, auto attendants, call queues and caller ID. It works with Microsoft 365 Business Basic, Standard and Premium.
• A connection to the phone network lets users call outside numbers. You choose one of the options below.
• Resource accounts are needed for each auto attendant or call queue. Microsoft says subscriptions with Teams Phone get a zero-cost allocation of Teams Phone Resource Account licenses, with extra ones available to buy.
• Shared Space licenses cover common area phones, such as a lobby or warehouse phone. Microsoft renamed these from Teams Shared Devices in April 2026.

Microsoft also sells a Teams Phone with Calling Plan bundle that combines the add-on and a Microsoft calling plan. Prices vary by country and change from time to time, so get current figures from Microsoft or your reseller before you budget.

Will it cost less than your current system?

It depends on what you pay now and what you would retire. Compare these items line by line:

• Per-user phone licenses and calling plans versus your current per-seat or per-line charges
• Hardware: headsets cost less than desk phones, and many staff will not need a desk phone at all
• Support and maintenance on an old phone system, which goes away
• Toll-free numbers and long-distance minutes, which may need extra calling credits
• Network upgrades such as QoS-capable switches or a backup internet line

Four ways to connect to the phone network

Microsoft’s PSTN connectivity guide lists four models. You can use more than one in the same company.

• Microsoft Calling Plan. Microsoft is your phone carrier. It is the simplest to set up, and Microsoft quotes a 99.999 percent reliability service level. Good for most small offices.
• Operator Connect. A certified third-party carrier provides numbers and calling, and you manage everything in the Teams admin center. Useful if a carrier offers better rates or support in your area.
• Teams Phone Mobile. A user’s mobile number doubles as their Teams number through a participating mobile carrier. Microsoft notes it supports user numbers only, not auto attendants.
• Direct Routing. Connects any carrier through a session border controller that you or a provider manage. More flexible, more work. Usually for larger or more complex setups.

Microsoft also offers Shared Calling, where a group of users share one main number through an auto attendant instead of each having their own. It can cut costs for staff who rarely make outside calls.

Keeping your existing numbers

Porting moves your numbers from your current carrier to Microsoft or your chosen operator. Microsoft’s porting guide for the Teams admin center asks for:

• The billing telephone number on your current account, exactly as the carrier has it
• The account number, any account PIN and the name of the authorized user
• The service address where the numbers are used
• A signed letter of authorization, which can be signed electronically in the US and Canada

Microsoft says it confirms port requests within 72 business hours, and the carrier then sets a date. Two things trip people up. If you port every number on an account, including the billing number, the old account is closed. If any detail does not match the carrier’s records, the port is rejected and you start again. Pull a recent bill before you begin, and do not cancel your old service until the port completes.

Call quality: what your network must handle

Most call problems are network problems. Microsoft’s network guidance for Teams lists recommended audio bandwidth of 58 kbps up and down per call, with a minimum of 10 kbps. Audio needs little bandwidth, but it is sensitive to delay, jitter and packet loss.

• Use wired connections for desk phones and reception wherever you can.
• Configure Quality of Service on your firewall and switches so voice traffic goes first. Microsoft recommends QoS on every managed network segment.
• Keep Teams traffic off the VPN. Microsoft recommends split tunneling so calls go straight to Microsoft 365.
• Plan Wi-Fi for voice. Microsoft suggests the 5 GHz band and non-overlapping access point channels.
• Consider a second internet connection with automatic failover if phones are critical to your business.

The Teams admin center includes a Network Planner and a Call Quality Dashboard to help size and monitor this.

Thinking about replacing your phone system? Phones touch your network, licenses and security all at once, so it helps to see the whole picture first. Our free Technology Health Assessment takes about 30 minutes of data collection. The next day you get a plain-language report rating your IT operations, cybersecurity, applications, business continuity and technology spending, with a short list of next steps in order. It is yours to keep, with no obligation. Book your assessment.

Emergency calling

Every number needs an emergency address so 911 calls reach the right place. Microsoft’s documentation explains how to assign emergency addresses and locations in the Teams admin center, including dynamic locations for people who move between offices. Set this up before go-live and test it with your carrier’s test procedure, not a real 911 call. This is general information, so confirm your obligations with your carrier.

What to keep off Teams

• Fax machines, alarm panels, elevator phones and gate entry systems that need analog lines. Keep these on their existing lines or a dedicated adapter service.
• Large call centers that need workforce management, detailed reporting or outbound dialing. These usually need a contact center product that integrates with Teams.
• Sites with unreliable internet and no backup connection.

We cover the network side in our new office IT setup checklist.

A simple rollout plan

1. List every number, who answers it and what happens after hours.
2. Check your network and fix QoS and Wi-Fi first.
3. Pick a connectivity option and buy licenses.
4. Build auto attendants and call queues and test them with a pilot group using temporary numbers.
5. Submit the port, train staff on transfers and voicemail, and keep the old system until the port date.

JLB USA plans phone moves as part of managed IT for businesses with roughly 25 to 100 employees, including vendor management with carriers. We reply within 5 minutes by email or phone, with on-site help in Atlanta, Birmingham and Chattanooga.

Keep reading

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• IT support for accounting firms: what CPA practices actually need
• How to migrate from Google Workspace to Microsoft 365 with minimal downtime
• Outsourced IT vs in-house IT: which is right for your business?

Related services

• Managed IT services
• New office IT setup checklist
• Microsoft 365 vs Google Workspace
• Free Technology Health Assessment