Traditional phone lines are being replaced. Here is a clear comparison of modern business phone options - VoIP, Microsoft Teams Phone, and cloud PBX - with cost and capability analysis for Australian SMBs.
Australia’s traditional phone network is being decommissioned. Telstra has been progressively shutting down ISDN and PSTN services, with full retirement underway. If your business still uses physical phone lines — the copper lines that come into a PBX box on the wall — you will be forced to migrate to an alternative regardless.
But beyond the forced migration question, the more important one is: what is the right phone system for a modern Australian business, and what should you be looking for?
This guide covers the three main options for Melbourne SMBs, with clear assessments of cost, capability, and fit.
Why Now Is the Right Time to Modernise Your Phone System
Beyond the Telstra network retirement, there are three strong reasons modern businesses are moving to cloud-based phone systems:
Remote and hybrid work: Traditional PBX systems tie staff to desk phones in the office. Cloud-based phone systems work from any device — desk phone, softphone on laptop, mobile app. Staff working from home have full phone system capability without any special configuration.
Integration with other tools: Modern cloud phone systems integrate with CRMs (calls logged automatically), Microsoft Teams (unified communications), and analytics dashboards. Traditional PBX systems are islands — they generate no useful data and do not connect to anything.
Cost: Modern VoIP and cloud systems are typically significantly cheaper than traditional PBX hardware and maintenance, particularly when factoring in the hardware replacement cycle.
Option 1: Hosted VoIP PBX (3CX, RingCentral, Vonage)
What it is: A cloud-hosted private branch exchange (PBX) that delivers all the functionality of a traditional office phone system — extensions, transfer, hold music, call queues, auto-attendant, voicemail — over your internet connection.
How it works
Your phone system runs in the cloud rather than on hardware in your office. Staff can use:
- IP desk phones (physical handsets that connect via ethernet)
- Softphones (an app on their computer)
- Mobile apps (their smartphone becomes their work extension)
Calls route through the internet rather than physical phone lines.
Key features
- Auto-attendant / IVR: “Press 1 for sales, press 2 for support” — automated call routing without a receptionist
- Hunt groups and ring groups: Calls ring multiple extensions simultaneously or in sequence
- Call recording: All calls can be recorded for compliance and training
- Voicemail to email: Voicemail messages delivered as audio files to email
- CRM integration: Calls logged automatically in HubSpot, Salesforce, or your CRM of choice
- Reporting: Call volume, wait times, answer rates — detailed analytics on phone activity
- Conference calling: Built-in multi-party conferencing without additional services
3CX specifically
3CX is the most commonly deployed hosted VoIP PBX for Australian SMBs. It offers a perpetual licence model (you own the system rather than paying per user indefinitely), strong CRM integrations, and excellent call quality. It runs on cloud infrastructure (self-hosted or 3CX-hosted) and includes a full-featured mobile app.
Best for: Businesses with reception staff, complex call routing requirements, high inbound call volumes, or a need for detailed call analytics. Law firms, medical practices, trades businesses, customer service teams.
Cost
- Typically $25-45 per user per month for hosted VoIP services
- 3CX perpetual licence model: one-off licence + hosting + SIP trunks — often cheaper long-term for stable headcounts
- Hardware (IP desk phones): $150-350 per handset if physical phones are required
Option 2: Microsoft Teams Phone
What it is: Microsoft’s phone system extension for Teams — turning Microsoft Teams into a full business phone system capable of making and receiving standard phone calls.
How it works
Teams Phone uses a Microsoft Phone System licence plus a calling plan or direct routing. Staff make and receive calls directly from Microsoft Teams — the same application they use for video meetings, messaging, and collaboration.
Key features
- Fully integrated with Microsoft Teams — one application for calls, video, chat, and collaboration
- Auto-attendant and call queues
- Voicemail to Teams
- Call recording (via Teams meeting recording or third-party integration)
- Number porting (your existing numbers move to Teams Phone)
- Works on any device where Teams runs — PC, Mac, iOS, Android
Why it is increasingly popular
For businesses already heavily using Microsoft 365 and Teams, Teams Phone is compelling because it consolidates communication into a single application. Staff do not need to switch between a Teams app for internal communication and a separate softphone for external calls.
The setup is also simpler than a full VoIP PBX for businesses without complex call routing requirements.
Honest limitations
- Call analytics and reporting are less detailed than dedicated VoIP PBX systems
- Complex call queue and IVR scenarios are less flexible than 3CX or similar
- Teams Phone is best when your whole team uses Teams consistently — if some staff do not use Teams, the unified experience breaks down
- International calling plans require separate licensing
Best for: Microsoft 365-centric businesses with 20+ staff, straightforward inbound call requirements, and a desire to consolidate all communications into Microsoft Teams.
Cost
- Microsoft Teams Phone Standard: approximately $12-18 AUD per user per month
- Microsoft 365 Business Premium includes Teams Phone capability (additional calling plan required)
- Domestic calling plans: approximately $10-15 AUD per user per month
- Hardware optional — most users operate via softphone only
Option 3: NBN Business Voice / SIP Trunks
What it is: Basic voice services delivered over your NBN business connection — a direct replacement for PSTN lines rather than a full phone system upgrade.
How it works
Your internet provider delivers voice channels over your NBN connection. These can connect to your existing PBX hardware (if it supports SIP) or to a basic VoIP gateway.
When this makes sense
This is the minimal-change option — appropriate if your existing PBX hardware is relatively modern (supports SIP), still has useful life, and your team does not need mobile or remote calling capability.
When it does not make sense
If your PBX is more than 5-7 years old, the cost of supporting it versus the cost of a modern cloud system typically tips toward replacement. If any staff work remotely, a system that does not have a mobile app is an ongoing friction point. If you want any integration with CRM, Teams, or call analytics, basic SIP trunks will not deliver it.
Best for: Businesses with modern SIP-capable PBX hardware and no immediate reason to change the phone system experience.
The Comparison at a Glance
| Hosted VoIP (3CX) | Teams Phone | NBN Voice/SIP | |
|---|---|---|---|
| Cost per user/month | $25-45 | $22-33 | $10-20 |
| Hardware required | Optional | Optional | May need gateway |
| Remote/mobile capability | Excellent | Excellent | Poor |
| CRM integration | Excellent | Good | None |
| Call analytics | Excellent | Basic | None |
| Complexity | Moderate | Low (if on Teams) | Low |
| Best for | Complex call handling | Microsoft 365 shops | Simple replacement |
The Migration Process
Moving from traditional phones to a cloud system is less disruptive than most businesses expect, with proper planning:
Number porting: Your existing phone numbers can be ported to the new system. Expect 10-20 business days for porting. Your old numbers work on the old system until porting is complete — no gap in service.
Parallel running: For a period of 2-4 weeks, both systems can run in parallel. This is particularly useful for businesses with complex call flows that need testing before full cutover.
Staff training: Moving from a desk phone to a softphone or Teams Phone takes 1-2 days of adjustment. The features are more capable, but different. A brief structured training session before cutover prevents the “how do I transfer a call?” chaos on day one.
The Decision Framework
If you are currently on an ISDN or legacy PBX system, you will need to migrate. The question is which system to migrate to.
Choose Teams Phone if: You are a Microsoft 365 shop, your team uses Teams daily, your call handling requirements are straightforward, and simplicity is a priority.
Choose hosted VoIP (3CX) if: You have reception staff, complex IVR or call queue requirements, high inbound call volume, need detailed call analytics, or want strong CRM integration.
Consider SIP trunks if: Your existing PBX hardware is less than 5 years old, supports SIP natively, and your team works entirely in the office with no remote work requirement.
For most Melbourne professional services firms making a deliberate choice in 2026, Teams Phone or 3CX are the right answers. The decision between them is primarily about whether Microsoft Teams is already central to how your team communicates.
Your IT or telecoms provider can review your current setup, your call volumes, and your team’s working patterns and make a specific recommendation. This is the kind of decision that takes an hour of conversation to get right — and several years of pain if you get it wrong.
