You've probably seen the phone icon in Teams
and wondered if you can actually make a call from there.
The answer is yes.
And it's much more powerful than you might expect.
By the end of this episode, you'll understand
what Teams Telephony is, how it replaces your old office phone
system, and the three main ways to connect it
to the outside world.
Traditional phone systems are expensive, complex,
and tied to a desk.
Teams Telephony changes all of that.
It turns your laptop, phone, or tablet into your work phone,
and it follows you wherever you go.
We'll break it down into four building blocks, what it is,
how it connects, what it costs, and what it can do for you.
What Teams Telephony actually is.
So what is Teams Telephony really?
The simplest way to put it?
It's a cloud-based phone system built
right into Microsoft Teams.
No separate hardware box, no tangled wires,
no blinking lights on a server rack.
It's all software.
And that means you can get started in minutes, not days.
Think of your old phone system like a private switchboard
inside your office building, where every desk had a wire
running back to that box.
If you wanted to move someone's desk,
you had to physically rewire things.
Teams Telephony is that same switchboard,
but it lives in Microsoft's cloud and follows you everywhere.
Your phone number is no longer tied to a physical location.
It's tied to you.
The key point is this.
Teams Telephony turns your laptop, smartphone,
or tablet into your work phone.
Same number on every device.
So when someone calls your office number,
it rings on whichever device you're signed into.
You don't need a physical desk phone anymore.
Why does this matter?
Because you're not stuck at your desk to take business calls.
You can work from home, from a coffee shop, from a client's office,
and your phone goes with you.
No call fording to set up, no separate apps to juggle.
It's all built into Teams.
Let me give you a concrete example.
Imagine you're working from home and someone calls your office number.
It rings on your laptop, you answer with your headset,
and that's it.
No forwarding, no hassle.
The caller has no idea you're not at your desk.
And if you need to step away,
you can transfer the call to your smartphone
and keep talking while you walk to the kitchen.
So whether you're at home in the office or on the go,
your work phone is always with you.
What does this mean for you?
Your phone is now an app that's always with you,
working the same way,
whether you're at your desk in a meeting room or on the road.
The same dial pad, contacts, and call history, all inside Teams.
That's the beauty of it, right?
How it replaces a traditional PBX?
So how does Teams actually replace the phone system's businesses
have used for decades?
Let me walk you through the old way first.
20 years ago, buying a business phone system
meant getting a big black box called a PBX,
private branch exchange, that sat in a closet
and routed calls through copper wires.
Every desk phone had to be physically wired back to that box.
VoiceMail was a separate system with its own tapes
or digital storage and adding a new employee
meant calling the phone company, waiting for a technician
and paying for installation.
That whole setup was expensive to buy, costly to maintain,
and pricey to upgrade.
The old way required a phone line for every desk,
a separate system for VoiceMail and a technician
for even simple changes like moving a phone.
When the hardware aged out every five to seven years,
you had to replace the whole thing at significant cost.
Teams Telephone does all of that in software.
There's no box, no wires, and you don't need a technician
for simple changes.
Microsoft runs the switchboard in their cloud data centers
so you just need an internet connection
and a license for each user.
That's it.
Let me explain the cloud PBX concept in simple terms.
Instead of buying and maintaining your own switchboard
in the office, you're renting a spot on Microsoft switchboard.
They handle the complicated stuff
like rooting, redundancy, and security updates.
You just tell them which users get which numbers
and everything else happens automatically.
For small businesses, this is huge.
You get enterprise grade features without the enterprise-sized
price tag or complexity.
A five-person company can have the same phone system
capabilities as a 5,000-person company,
auto-attendance, call-cuse, VoiceMail with transcription,
all that used to cost thousands in add-on hardware are just included.
Here's a concrete example.
Adding a new employee used to mean ordering a new phone line
from your carrier, waiting days or weeks for installation,
and having a technician configure the PBX.
With Teams, you assign a phone license and a phone number
in the admin center.
It takes about five minutes and the new employee
signs into Teams to find their phone working.
What this means for you is that your phone system scales
with your business.
You can add users instantly and remove them just as fast
with no hardware to buy or replace.
If you grow from 10 people to 50,
you don't need a bigger box in the closet, just more licenses.
The three ways to connect to the phone network.
Now here's the part that confuses most people.
How does Teams actually connect to the outside world?
There are three ways.
Here's the problem.
Teams handles internal calls between people in your company
for free.
If you're both on Teams, you can call each other
without extra cost.
But to call a regular phone number,
like a customer's mobile or a supplier's landline,
you need a connection to the public telephone network.
That's the network every phone in the world is connected to.
And Microsoft gives you three choices
for how to get there.
First option is Microsoft calling plans.
This is the simplest approach.
You buy phone numbers and calling minutes directly from Microsoft
and they handle everything.
You don't need to talk to your phone carrier at all.
The cost runs about $8 to $15 per user per month,
depending on the plan.
But it's not available everywhere.
Microsoft calling plans only work in certain countries.
So if you have offices in places where Microsoft
doesn't offer the service, you'll need another option.
Second option is operator connect.
This is where you keep your existing phone carrier,
but they connect directly into Teams
with no extra hardware needed.
Your carrier manages the connection on their end.
Think of it as your phone company
plugging their service straight into Microsoft system.
This is becoming more popular
because it gives you the simplicity of a managed service
while keeping your existing carrier.
Many major phone companies now offer operator connect,
so it's worth asking yours.
Third option is direct routing.
The most flexible approach, but also the most technical.
You use your own equipment, a device called
a session, border controller or SBC
to connect your existing phone lines to Teams.
You manage the connection yourself
or your IT partner does it for you.
This gives you the most control
and it's often the cheapest option
if you already have phone lines
and just want to connect them to Teams.
But it requires someone who knows what they're doing
to set it up.
Here's an analogy.
Calling plans is like buying a prepaid phone from Microsoft.
Simple and everything's included,
but you're limited to what Microsoft offers.
Operator connect is like keeping your current carrier
but plugging them into Teams.
Your carrier handles the connection
and you just use the service.
Direct routing is like building your own bridge
between your existing phone lines and Teams.
It takes more work, but you get exactly what you want.
Why does this matter?
Because you're not locked into one approach.
You can choose based on your budget,
your location and your existing contracts.
A small business in the US
might use Microsoft calling plans for simplicity.
A global company with offices in multiple countries
might use Operator Connect to keep local carriers
in each region and a company that already has phone lines
and a good relationship with their carrier
might choose direct routing to save money.
What this means for you is that you have options.
Don't let the technical names scare you.
Your IT partner or Microsoft reseller
can help pick the right one based on your situation.
You don't need to become an expert
on session border controllers.
You just need to know that the options exist.
Licensing and costs simplified.
So you know what it is and how it connects.
Next question everyone asks,
how much does it actually cost?
Here's the good news.
If you already have Microsoft 365,
your part way there because teams is included
in your subscription, but telephony is an add-on,
and you need two pieces to make it work.
First you need a team's phone license
which unlocks the phone system features
like making and receiving calls, setting up auto-attendance
and using voicemail and that costs about $8 to $10 per user per month.
Second you need a way to connect to the phone network,
which is one of the three options we just talked about.
So the total cost is the phone license
plus the calling plan or connection.
Let me break down the pricing a little more.
Teams phone standard costs about $10 per user per month
and gives you all the PBX features.
Then you add a calling plan on top of that
which runs $8 to $15 per user per month
depending on how many minutes you need
or you can use operator connect or direct routing
which is often cheaper per minute
but has different pricing structures.
How does this compare to a traditional phone system?
A typical on-premise PBX costs about $15 to $25 per user per month
when you factor in hardware, maintenance contracts
and phone lines and that's just the recurring cost
because you also have to buy the hardware upfront
which could be thousands of dollars.
Teams phone is often 30 to 60% cheaper than that
so if you're spending $20 per user per month on your old system
you might end up spending 10 to $14 per user per month with Teams.
But here's something you need to watch out for.
The real world cost can be two to three times
the headline license price once you add calling minutes and support.
So don't just look at the $10 number
and assume that's your total cost.
You need to factor in the calling plan
any international calling and the cost of support
if you're working with a partner.
So get a full quote before you make a decision.
Let me give you a concrete example.
For a 10 person company, Teams phone might cost $150 to $250
per month total for phone licenses plus a calling plan
while a traditional PBX for the same company
could easily cost $300 to $500 per month.
Plus you had to buy the hardware upfront
so you're saving money from day one
and you never have to replace expensive hardware again.
What this means for you is that it's almost certainly
cheaper than what you're paying now,
but get a full quote and don't forget
to factor in the cost of your internet connection
because Teams phone needs good internet to work well.
And if your internet is slow or unreliable,
you might need to upgrade that too.
Features that matter to you.
OK, so it's cheaper and simpler, but what can it actually do?
Let's talk about the features that matter.
The basics are straightforward.
You can make and receive calls, transfer calls,
put calls on hold and see your call history all inside Teams.
Nothing complicated there, but the features
that really make a difference are the ones
that used to cost you extra money.
Voice mail with transcription is a good example.
When someone leaves a message,
you get a written transcript right in your Teams chat
so you can read it instantly instead of dialing
into a voice mail box and listening through prompts.
And if you want to hear the actual recording,
you can play it back with one click.
But most of the time, the transcript is enough
because you know who called and what they wanted
without ever listening to a message.
Auto attendance are another big one.
Think of it as a virtual receptionist
that greets callers and roots them to the right place,
like press one for sales, press two for support.
You don't need a human being to answer the phone
because the system handles it automatically based
on the time of day, the day of the week, even holidays.
And if your office is closed,
the auto attendant can play a different greeting
and offer to take a message.
All of this used to require expensive hardware
or a third party service, but now it's just a setting in Teams.
Call Q's work hand in hand with auto attendants.
When someone presses one for sales,
the call goes into a queue
and rings the first available person in the sales team.
And if everyone's busy, the caller
he has music or a message while they wait
while the system distributes calls evenly
so nobody gets overwhelmed, perfect for support teams,
reception desks or any group that handles incoming calls.
Delegation is a feature that assistants love.
An assistant can make and receive calls
on behalf of a manager.
And when they call out, it shows up as the manager's number.
So if a client calls back, they reach the manager,
not the assistant.
And it's a simple thing, but it makes a huge difference
in how professional your company sounds.
Call Park is one of those features
you don't know you need until you use it.
You put a call on hold, the system gives you a code,
you walk to another room, pick up a different phone,
enter the code and the call connects.
Great for moving between meeting rooms
or handing off a call to a colleague
in another part of the building.
And then there's presence integration.
You can see if someone is on a call before you call them
because their status shows in a call right next to their name
so you know not to interrupt.
And it reduces the number of times you call someone
only to get sent to voicemail
because they're already talking to someone else.
Why does all this matter?
Because these features used to require expensive add-ons
or completely separate systems.
Auto-attendants were a separate product.
voicemail transcription was a premium service.
Call Q's required special hardware,
but now they're all built into Teams phone
and you don't pay extra for them.
Let me give you a concrete example.
A small law firm with three lawyers
can set up an auto-attendant for their main number
where callers press one to reach the first lawyer
two for the second, three for the third.
And if nobody answers the call,
goes to voicemail and the lawyer gets a transcript
in their Teams chat.
And they can call back from their laptop
or their phone with no receptionist needed,
no extra hardware, no separate voicemail system.
Everything works inside the app they already use
for email and meetings.
What this means for you is that you get a professional phone
system without the professional price tag.
Small businesses can sound like large enterprises
and it all works inside the app you already use.
Security and reliability.
Now let's talk about something that worries people.
Security and reliability.
Moving your phone system to the cloud sounds risky.
What if it goes down?
What if someone eavesdrops on your calls?
Those are fair questions and here's how Microsoft handles them.
Start with encryption.
Every call made through Teams is encrypted in transit.
That means the audio is scrambled as it travels
between you and the person you're talking to
using the same security standards
that online banking users.
For one to one calls, you can even enable end-to-end encryption.
The audio is encrypted on your device
and decrypted only on the other person's device.
So no one, not even Microsoft can listen in.
Uptime is another big concern.
Microsoft guarantees 99.99% uptime for Teams phone,
which works out to less than five minutes of downtime per year.
Five minutes.
Most on-premise phone systems can't match that
because they depend on a single box in your office.
If that box fails, your phones are down until someone fixes it.
With Teams, Microsoft runs multiple data centers around the world.
If one goes down, another takes over automatically.
Identity protection is built into Teams users
your Microsoft 365 log-in to authenticate you.
So if you have multi-factor authentication enabled
and you should, your phone system is protected by the same security.
Someone can't just pick up a desk phone and make calls as you.
They need your credentials and your second factor.
Think of it like a reception desk that checks your ID
before letting you into the building.
Compliance is another area where Teams phone shines.
It supports industry standards like HIPAA for healthcare
and GDPR for privacy.
Recording and archiving are built in
so you can meet regulatory requirements
without buying separate software.
If you're in a regulated industry,
you can record calls, store them securely,
and produce them for audits.
Here's the thing.
Your phone system is now as secure
as the rest of your Microsoft 365 environment.
You don't need a separate security setup for your phones.
The same policies that protect your email and your files
also protect your calls.
Let me give you a concrete example.
A healthcare clinic uses Teams phone for patient calls.
All calls are encrypted.
The clinic can record calls for compliance purposes.
Voice mails are stored securely.
And because Teams supports HIPAA,
the clinic stays compliant with regulations.
No separate security system needed.
What this means for you is that you're not trading security
for convenience.
The cloud version is often more secure
than an old on-premise system.
Microsoft has security teams and infrastructure
that most small businesses could never afford on their own.
How all the pieces connect.
Let's step back and see how all these pieces
fit together into one system.
Because Teams telephony isn't just one thing.
It's a cloud PBX, a connection to the phone network,
and a set of features.
All wrapped in the Teams app you already use
for chat and meetings.
Here's the aha moment.
Most people miss.
Most of us think of a phone system as hardware.
A box in a closet.
Why is in the walls?
A plastic handset on your desk.
But Teams telephony is something different entirely.
It's an identity.
Your phone number is attached to you not to a desk.
Wherever you sign into Teams, your phone follows.
Sign in on your laptop in a coffee shop
and your office number rings there.
Sign in on your phone while you're traveling.
And it rings there.
The number doesn't move.
You do.
Now watch how the pieces interact.
The customer calls your main number.
The auto attendant picks up and plays a greeting.
The caller presses one for support.
That sends the call to a call queue.
The queue rings the first available support agent
on their laptop.
If they answer, great.
If everyone's busy, the caller hears music on hold.
If nobody answers after a certain time,
the call goes to voicemail.
The system transcribes the message
and sends it to your Teams chat.
You read it, call back, and the whole cycle starts again.
All automatic.
No human intervention needed.
Why does this matter?
Because these pieces work together
to create a seamless experience.
You don't have to think about the technology.
The auto attendant doesn't need someone
to manually transfer calls.
The call queue doesn't need someone to watch who's available.
The voicemail doesn't need someone
to check a separate inbox.
It all just happens.
Let me walk you through a full example
so you can see how smooth it is.
A customer calls your main number.
The auto attendant asks them to press one for support.
The call goes to the support queue.
It rings the first available agent on their laptop.
They answer, help the customer, and hang up.
If that agent was already on another call,
the system would ring the next available person.
If everyone was busy, the caller would get voicemail.
And later you'd see the transcript in Teams.
No missed calls, no lost messages,
no angry customers who couldn't get through.
What this means for you is that the magic
isn't any single feature.
It's how they all connect to make your work life easier.
The auto attendant, the call queue,
the voicemail transcription, the presence indicators,
they're designed to work together
so you don't have to think about them.
You just do your job and the phone system handles the rest.
Actionable takeaways.
So what should you do next?
I get this question a lot.
Here are three simple steps to get you moving.
Step one, check if your current Microsoft 365 license
already includes Teams phone.
If you have an E5 license, you're good.
The phone system is already included.
If you have E3 or business premium,
you'll need to add the Teams phone license separately.
It's about $8 to $10 per user per month.
You can check this in your Microsoft 365 Admin Center
under billing and it takes about two minutes.
Seriously, it's that quick.
It's a simple check that saves you a lot of money.
Step two, talk to your phone carrier
or a Microsoft partner about the best way to connect.
Tell them where you're located and how many users you have.
They'll help you choose between Microsoft calling plans,
operator connect, or direct routing.
You don't need to become an expert on this.
A good partner will ask the right questions
and give you a recommendation.
They'll ask about your current setup and future needs.
That's what they're there for.
Step three, start small.
Don't try to move your entire company at once.
Pick a handful of users to pilot your new setup.
Set up an auto attendant for your main number.
Test it for a week.
You'll quickly see how much simpler it is.
Your pilot users will tell you what works and what doesn't.
Then you can roll out to the rest of the company
with confidence.
You'll build confidence with each successful rollout.
That's the smart way to do it.
That's the system.
Three ways to connect one app to use them all.
If this episode helped you see the big picture,
share it with someone who's still stuck with an old desk phone
and subscribe for more plain English breakdowns
of Microsoft Tech.
I'm Mirko Peters from M365FM, and I'll
see you in the next episode.