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March 3, 2021

Teams Phone System: Calling Plans vs Direct Routing


Every business needs a phone system that allows them to communicate effectively at optimal rates. A phone system that can accommodate a lot of lines is always preferable for employee productivity. As can be imagined, the set-up and maintenance cost of such a telephone system On-Premise is quite high. However, there is a real brilliant feature that Microsoft Teams offers for unified communications that will blow your mind away. Microsoft Phone System has the ability to replace your entire business phone system with a cloud-based phone system that also offers video calling!


Teams Phone System Features

Here are a number of key features that the Microsoft Teams Phone System offers:

1. Cloud Auto Attendants

2. Call Queues - High-quality calls

3. Audio Conference

4. Extension Dialing

5. Cloud phone calls / Voicemail

6. Contact Center Integration

7. Cloud Compliance Recording

8. Outbound calls

9. One-on-one-call

10. Virtual calling features

11. File Sharing


1. Auto Attendant

Auto attendants let people call your organization and navigate a menu system to speak to the right department, call queue, person, or an operator. You can create  auto attendants and device permissions for your organization with the Microsoft Teams admin center.


2. Call Queues

Call queues provide a method of routing callers to people in your organization who can help with with a particular issue or question. Calls are distributed one at a time to the people in the queue (who are known as agents).


3. Audio Conferencing

Sometimes people in your organization will need to use a phone to call into a meeting. Microsoft Teams includes the audio conferencing feature for just this situation! People can call into Teams meetings using a mobile phone, instead of using the Teams app on a mobile device or PC or on the web version on your browser.


4. Extension Dialing

Extension dialing and desktop phone is an efficient way to contact specific groups or individuals in a large organization. Providing employees and active users with dedicated extensions allows internal callers to quickly contact a specific party and Microsoft Teams offers this feature.


5. Cloud Voicemail

A growing business cannot afford to miss incoming calls. A missed call could be a prospect with high intent or an angry customer — an opportunity you wouldn’t want to miss or a problem you need to solve on time. So, what can you do about the phone calls your team is unable to attend? The solution is simple. You can give your callers the option of leaving you a voicemail message, and call them back. Similarly, you can also use voicemail routing to capture calls you receive outside business hours using MS Teams Phone System where you may also change the voicemail greetings, use voicemail transcriptions etc.


6. Contact Center integration

The APIs allow partners to develop and integrate CCaaS solutions for Teams. In addition, MS has developed the Connected Contact Center for Microsoft Teams Certification Program to provide customers with the assurance that each participating partner’s solution has been tested and verified to provide the quality, compatibility and reliability they expect from Microsoft solutions.

You may check the CCaaS partner certifying status.


7. Cloud Compliance Recording

In Microsoft Teams, users can record their Teams meetings and group calls to capture audio, video, and screen sharing activity. There is also an option for recordings to have automatic transcription, so that users can play back meeting recordings with closed captions and search for important discussion items in the transcript. The recording happens in the cloud and is saved to Microsoft Stream, so users can share it securely across their organization.


Teams Phone System Setup Options

There are two setup options for it.

1. Existing Telecom Provider

2. Microsoft as Phone Provider

Let’s have a look into each of it.


1. Existing Telecom Provider

For having a Teams Phone System setup where there is an existing telecom provider is present, it primarily revolves around two scenarios:

1.1 Direct Routing

1.2 Skype for Business Hybrid Voice


1.1 Direct Routing

Microsoft Teams Phone System Direct Routing lets you connect a supported, customer-provided Session Border Controller (SBC) to Microsoft Phone System. With this capability, for example, you can configure on-premises Public Switched Telephone Network (PSTN) connectivity with Microsoft Teams client

1.1.1 Connecting your existing PBX

1.1.2 Direct Routing Supported Devices


1.1.1 Connecting your existing PBX

When you’re having your lines with a local provider (existing PBX) already and would not like to drop it as your number’s provider, you have the option of integrating it with MS Teams using Direct Routing and you’d be able to continue using the same lines from your provider with no issues.

Microsoft Phone System Direct Routing is the service inside of Teams that allows organizations to connect existing PBX (external phone lines) and use Teams as an office phone system.

To use Direct Routing, one would need a Session Border Controller (SBC) to provision this functionality which allows to connect to the existing PBX (local provider) and use it with MS Teams with no issues.

Teams phone system.png
1.1.2 Direct Routing Supported Devices

Microsoft only supports certified SBCs to pair with Direct Routing. Because Enterprise Voice is critical for businesses, Microsoft runs intensive tests with the selected SBCs, and works with the SBC vendors to ensure the two systems are compatible. The best example for a ceritified Cloud SBC is the Ribbon SBC Lite. 

Devices that have been validated are listed as Certified for Teams Direct Routing. The certified devices are guaranteed to work in all scenarios.


1.2 Skype for Business Hybrid Voice

Now where we are using Skype for Business Server 2019 and you’d like to start using MS Teams in parallel without porting numbers from your local PBX to Microsoft for PSTN connectivity to use with MS Teams, you have the option of Hybrid Voice.

You may always enable On-Premise PSTN connectivity with MS Teams where you’re having a Hybrid Setup with Skype for Business Server and users migrated to Teams would be able to use the same line as were using in On-Premise Setup.


2. Microsoft as Phone Provider

When we are talking about Microsoft as a Phone Provider, actually we are talking about pure Cloud PBX setup. Where all of your phone lines either would be purchased directly from MS for a new Setup or would be ported over to MS from some local provider (existing PBX) to continue using them.

2.1 Cloud PBX


2.1 Cloud PBX

For the Cloud PBX setup, we primarily have two scenarios to discuss:

2.1.1 Porting Phone Numbers to Microsoft

2.1.2 Migrating from Skype for Business


2.1.1 Porting Phone Numbers to Microsoft

You may always use the porting wizard in the Microsoft Teams admin center to transfer your phone numbers from your current service provider to Teams. After you port your phone numbers to Teams, you’d be able to continue your existing lines with it but here onwards Microsoft will become your service provider and will bill you for those phone numbers.


2.1.2 Migrating from Skype for Business

When we talk about migrating from Skype for Business, we have two options to discuss.

2.1.2.1 Migrating from Skype for Business Online

2.1.2.2 Migrating from Skype for Business Server


2.1.2.1 Migrating from Skype for Business Online

To have the help in detail for Upgrading from Skype for Business Online to Microsoft Teams.

Now when you’ve migrated to Teams. Your Phone System should work as it was working earlier but there are somethings to note for the PSTN connectivity.

  • Phone System with Teams is supported after the user is in TeamsOnly mode. (If the user is in Islands mode, Phone System is only supported with Skype for Business.)
  • If users already have a Microsoft Calling Plan with a phone number, the only required change is to assign the user TeamsOnly mode in TeamsUpgradePolicy. Prior to assigning TeamsOnly mode, incoming PSTN calls will land in the user’s Skype for Business client. After the upgrade to TeamsOnly mode, incoming PSTN calls will land in the user’s Teams client.


2.1.2.2 Migrating from Skype for Business Server

This portion will help you through if you’re looking to migrate to MS Teams from Skype for Business Server and using an existing PBX infrastructure with it. After the migration, your PSTN provider would be MS and all your numbers would reside with it.


Steps to Perform:
  • Purchase an Office 365 Sub (MS Teams) depending on the users count
  • All the required numbers should be requested to port over MS O365 tenant i.e., user numbers, service numbers, conference bridges
  • Please keep in mind that Not all locations can handle Teams Calling plans, Only Belgium, France, Germany, Ireland, Netherlands, Puerto Rico, Spain, United States, United Kingdom can
  • All the detailed information would be needed regarding Response Groups already present, it’s queues and respective agents so no interruptions in the services of Auto Attendants will be faced
  • All numbers should be ported according to the downtime to avoid any disruptions of services
  • Fetch the information about the Calling Plan needs as per each user in detail
  • Assign Licenses of MS Teams and Calling Plan as per needs to synced users
  • Fetch the information about the Calling, Call Park and Caller ID policies to implement
  • Fetch the information about the Extension Dialing needs and please note there are certain limitations with it as the numbers should be in series to create normalization rules to use them effectively and the series should not overlap with any other if present
  • There may come some limitations with Auto Attendants as both the technologies are entirely different
  • Replicate entire Response Groups Infrastructure in MS Teams as much as possible
  • UCS should be rolled back successfully for all the users to get their contacts online safely
  • Setup hybrid connectivity
  • Move users from the on-premises to the cloud
  • Assign the respective Users’ numbers, Auto Attendants’ numbers etc. to operate like earlier
  • After the Change of DNS records for Teams, Decommission the server


Microsoft Teams Certified Devices

To enhance your experience with Microsoft Teams Audio and Video conferencing, there are certainly a wholesome certified devices to use with Teams that’d not only allow to satisfy your needs but would greatly enhance the Teams experience.

The devices would include Meeting Rooms equipment, Desk Phones etc.


Teams Phone System Licensing and Pricing

There are two core things to look for when we talk about licensing our Teams for PSTN connectivity and enabling it for voice capabilities:

1. Microsoft Phone System

2. Domestic and International Calling Plan Options


1. Microsoft Phone System

To enable a user for voice/PSTN connectivity, it should be assigned with a Teams Phone System license. Each user to opt for the PSTN functionality should be licensed with it. There are several combinations using which you may enable the user for it.

1.1 Microsoft 365 Business Subscription + Business Voice

1.2 Office 365 E1 + Phone System + Calling Plan

1.3 Office 365 E3 + Phone System + Calling Plan

1.4 Office 365 E5 + Calling Plan


1.1 Microsoft 365 Business Subscription + Business Voice

You may acquire the Microsoft 365 Business subscription that would enable your user for Teams plus other needs to follow. To decide between Microsoft 365 Business Subscriptions, you may look into this article.

Now when you have acquired any of the Microsoft 365 Business Subscription, you’d need to assign each user with another license bundle from Microsoft which is Business Voice.

Business Voice comes with Phone System license which enables the user for PSTN connectivity and also provide the Domestic Calling plan which we may say is the pool of minutes for the user to use from for local PSTN calls. A bonus we may say also comes in this bundle which is a license of Audio Conferencing and enables Dial in Audio Conferencing. Business Voice would cost $20 per user /month.

You may buy an add on for International Calling Plan to enable users to call internationally which would cost additional $12 per user /month in this option.


1.2 Office 365 E1 + Phone System + Calling Plan

Another option to go with is the cheapest of all from Office 365 Enterprise plans which is E1 costing at $8 per user /month. It’d enable the user for MS Teams. To have the user enabled for PSTN connectivity, one need to assign each user with Phone System add on which would cost $8 per user /month.

To give a pool of minutes to a user to use for PSTN calls, one need to assign a calling plan. For its options, you may refer to its section in the end of article.


1.3 Office 365 E3 + Phone System + Calling Plan

The second to choose from Office 365 Enterprise plans is E3 which enables the user for Teams and costs $20 per user /month. To have the user enabled for PSTN connectivity, one need to assign each user with Phone System add on which would cost $8 per user /month.

To give a pool of minutes to a user to use for PSTN calls, one need to assign a calling plan. For its options, you may refer to its section in the end of article.


1.4 Office 365 E5 + Calling Plan

Being the best of the lot from Office 365 Enterprise plans, E5 not only enable the user for MS Teams but Phone System license would come along with it. E5 would cost $35 per user /month.

To give a pool of minutes to a user to use for PSTN calls, one need to assign a calling plan. For its options, you may refer to its section in the end of article.


2. Domestic and International Calling Options

To give a pool of minutes to a user to use for PSTN calls, one need to assign a calling plan. Calling plans are offered in two options from Microsoft.

2.1 Domestic Calling Plan

2.2 Domestic and International Calling Plan


2.1 Domestic Calling Plan

Licensed users can call out to numbers located in the country/region where they are assigned in Microsoft 365 or Office 365. It’d cost $12 each user /month.


2.2 Domestic and International Calling Plan

Licensed users can call out to numbers located in the country/region where their Microsoft 365 or Office 365 license is assigned to the user based on the user's location, and to international numbers in 196 countries/regions. It’d cost $24 each user /month.

(Last Updated On: August 24, 2021)

Last Updated 4 weeks ago

About the Author

Ateeb is a Microsoft Certified Solutions Associate. He aids clients in deployment, and management of Microsoft technologies - for both, on-premises and on the cloud environment. With significant experience in deploying stand-alone and enterprise solutions, Ateeb enjoys helping organizations with their digital transformation journey.

Ateeb Fayyaz

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