Still paying for a legacy phone system? Microsoft Teams Phone can replace your entire phone infrastructure while saving money and adding features. Here is how it works.
Traditional phone systems — on-premises PBX hardware or older hosted VoIP solutions — are being replaced. Microsoft Teams Phone has become the most compelling replacement for Melbourne businesses already using Microsoft 365: it integrates directly with Teams, eliminates a separate phone system vendor, and typically reduces total phone infrastructure cost while adding capabilities the old system never had.
This guide explains how Teams Phone works, what it costs, and how to migrate from a legacy system.
What Microsoft Teams Phone Is
Microsoft Teams Phone (formerly Phone System) is a cloud-based PBX solution fully integrated with Microsoft Teams. It enables:
- Making and receiving PSTN (regular phone network) calls through the Teams client
- Auto attendant (virtual receptionist with menu routing)
- Call queues (multiple agents answering a shared number)
- Voicemail with transcription
- Call recording and compliance recording
- Call transfer, hold, and conference
- Call analytics and reporting
- Optional physical desk phones (Teams-certified hardware)
Staff use their existing Teams client — on laptop, desktop, or mobile app — to make and receive calls. No separate softphone application required. For staff who prefer physical phones (reception, executive desks), Teams-certified desk phones from Yealink and Poly integrate directly.
The Licence and Calling Plan Structure
Teams Phone requires licences beyond the standard Microsoft 365 subscription:
Teams Phone Standard Licence
Cost: ~$10 AUD/user/month
Provides: The PBX capability — voicemail, call queuing, auto attendant, transfer. But not the ability to call external numbers — that requires a calling plan.
Calling Plans (Microsoft Direct)
Microsoft offers calling plans that provide PSTN calling minutes directly through Microsoft:
- Domestic Calling Plan: A pool of minutes for calls within Australia
- International Calling Plan: Includes international minutes
Cost: Domestic plans from ~$15/user/month in Australia.
Consideration: Microsoft’s direct calling plan pricing in Australia is higher than many Australian SIP trunk providers. Many businesses use Direct Routing instead (see below).
Direct Routing (Operator Connect)
Direct Routing connects Teams Phone to an Australian SIP trunk provider (Aussie Broadband, Symbio, Telstra, Bsquared) for PSTN calling. This typically provides:
- Lower per-minute costs than Microsoft’s calling plans
- Australian local numbers and 1300/1800 number support
- Retention of existing phone numbers
How it works: A Session Border Controller (SBC) connects your Teams tenant to the SIP provider’s network. This can be a cloud-hosted SBC provided by your carrier (Operator Connect — the simpler option) or an on-premises/cloud SBC you manage.
For most Melbourne SMBs, Operator Connect is the right choice: the carrier provides the SBC as a managed service, number porting is handled by the carrier, and ongoing management complexity is minimal.
Auto Attendant and Call Queue Configuration
Auto Attendant
The auto attendant is the virtual receptionist that answers your main business number:
- “Thank you for calling CX IT Services. Press 1 for sales, press 2 for support, press 0 to speak with reception.”
- Can route to individuals, call queues, voicemail, or external numbers
- Business hours and after-hours routing configured separately
- Holiday routing for public holidays
Setup: Microsoft Teams admin centre → Voice → Auto attendants → Create an auto attendant. Connect a Resource Account with a phone number assigned.
Call Queue
Call queues distribute incoming calls to a group of agents (your support team, sales team, etc.):
- Calls ring all agents simultaneously or in sequence
- Queue holds callers with music on hold while waiting
- Overflow routing if no agent answers after defined wait time
- After-hours routing to voicemail or alternative number
Setup: Microsoft Teams admin centre → Voice → Call queues.
Physical Phones: Do You Need Them?
Most staff in a Teams Phone deployment work entirely through the Teams client (laptop or mobile). Physical desk phones add cost and are unnecessary for most roles.
Roles that benefit from physical phones:
- Reception (needs dedicated device, multiple simultaneous lines visibility)
- Executive desks (preference for dedicated device)
- Conference rooms (shared speakerphone for meeting room calls)
Recommended Teams-certified hardware:
- Reception/standard desk: Yealink T55A (
$200), Yealink T57W ($300) - Executive: Poly CCX600 (~$400)
- Conference room: Poly Trio 8500 (
$800), Yealink CP925 ($350)
Number Porting: Keeping Your Existing Numbers
Existing phone numbers can be ported to Teams Phone through your Operator Connect provider or Microsoft directly. The porting process:
- Confirm your numbers are portable (most Australian numbers are)
- Submit a porting request to the new carrier with authorisation from the current carrier
- Schedule a porting date (typically requires 2-4 weeks lead time)
- On porting date, numbers transfer — brief outage possible during cutover
Keep your old system active in parallel until porting is confirmed complete.
Total Cost Comparison
Legacy hosted VoIP system (20 users):
- VoIP system licence: $30/user/month = $600/month
- Phone number charges: $50/month
- PSTN calling: $100/month
- Hardware (amortised): $50/month
- Total: ~$800/month
Microsoft Teams Phone (20 users):
- Teams Phone Standard licence: $10/user = $200/month
- Operator Connect SIP trunks: $15/user equivalent = $300/month
- Hardware (minimal — most use Teams client): $20/month amortised
- Total: ~$520/month
Savings of $2,000-4,000/year at 20 users are typical in migrations from legacy hosted VoIP to Teams Phone — while adding features (transcription, call recording, integration with Teams meetings and chats) the old system did not have.
CX IT Services deploys and manages Microsoft Teams Phone for Melbourne businesses. Book a Right Fit Call to discuss migrating your phone system.
