The Decline of the Traditional PBX

For decades, the office phone system — a physical Private Branch Exchange (PBX) with desk handsets, copper line connections, and proprietary maintenance requirements — was simply how businesses managed their telephony. But over the past five years, this model has been rapidly disrupted by cloud-based calling solutions that offer more features, lower costs, and far greater flexibility.

For businesses already using Microsoft Teams for chat, meetings, and collaboration, Microsoft Teams Phone is the natural next step — turning every Teams-enabled device into a full-featured business phone, without the need for a separate phone system vendor or specialised hardware.

What Is Microsoft Teams Phone?

Microsoft Teams Phone (formerly Teams Calling) is a cloud-based business phone system built directly into Microsoft Teams. With the appropriate licensing and a calling plan or direct routing configuration, your business phone numbers are delivered through Teams — allowing staff to make and receive calls from their laptop, desktop, mobile phone, or a certified Teams handset, from anywhere with an internet connection.

Key Features of Microsoft Teams Phone

• Inbound and outbound calling — using your existing business phone numbers, ported from your current carrier
• Auto attendants — professional automated greetings and menu systems that route callers to the right person or department
• Call queues — distributing incoming calls across teams with hold music, overflow routing, and wait-time announcements
• Voicemail with transcription — missed calls are transcribed and delivered to the user’s email and Teams
• Call recording — recording calls for training, quality assurance, or regulatory compliance
• Presence integration — callers can see whether someone is available, in a meeting, or offline before calling
• Number porting — your existing business numbers transfer to Teams with no customer-facing disruption

How Much Does Teams Phone Cost?

Microsoft Teams Phone requires a Teams Phone licence add-on (currently approximately $10–15 AUD per user per month depending on your Microsoft agreement) plus a calling plan or direct routing arrangement with a carrier for the actual call minutes.

Most businesses that move to Teams Phone see a reduction in total telephony spend by eliminating PBX hardware maintenance, physical line rentals, and a separate phone system vendor. The exact savings depend on your current setup, but consolidating into a single Microsoft relationship and platform typically produces meaningful cost improvements.

What Happens to Existing Handsets?

Many modern business handsets from Yealink, Poly, and AudioCodes are Microsoft Teams certified and can be reconfigured to work with Teams Phone without replacement. Where existing hardware is not compatible, the most common approach for most staff is to use softphone functionality on their laptop or mobile — eliminating the need for physical handsets entirely for many roles.

Is Teams Phone Right for Your Business?

Teams Phone makes the most sense for businesses that: are already using Microsoft Teams for collaboration; have a legacy phone system that is ageing or becoming expensive to maintain; have remote or hybrid workers who need to make and receive business calls from anywhere; or want to consolidate their communication tools into a single platform. If your business fits one or more of these descriptions, Teams Phone is worth a serious evaluation.