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Replace Your Business Phone System with Microsoft Teams

Microsoft Teams Phone System is a powerful tool that can help businesses streamline their communication and improve productivity. In this blog post, GreenPages’ Director of Carrier Services Kurt Karshick outlines the various options for moving to a Microsoft Teams Phone System and why it’s a smart choice for businesses of all sizes. 

My friends, there were several very interesting announcements made about Microsoft Teams at Enterprise Connect 2023 last week. While most people are excited about the reimagining of the Teams desktop app coming later this year, there are still so few people who know about the true killer feature of Microsoft Teams as a total replacement for your business phone system.

You probably know that many businesses made a big investment in Microsoft 365 during the pandemic, partly to enable remote working and collaboration provided by Microsoft Teams. Chat, video, and white boarding are just a few capabilities Teams brings to the table, but it also enables employees to make voice over IP (VoIP) calls to any other team member using a Windows PC, Apple Mac/iPhone/iPad, or Google Android device running the Microsoft Teams app. However, these VoIP calls are essentially an intercom system for employees inside a company because the Teams app does not automatically connect you to the public switched telephone network (PSTN), which is the phone network used to make and take calls on landlines and most mobile numbers assigned by the big carriers. Most businesses with desk phones use some form of public branch exchange (PBX) hardware installed at an office location or they went to unified communications as a service (UCaaS). By default, Microsoft Teams cannot connect to an onsite PBX. I say “by default” because there is a process for adding PSTN calling capabilities to Teams, it’s just not a built-in feature that Microsoft includes with Teams with most Microsoft 365 subscription plans.

So, if your business uses Microsoft Teams as the go-to app for collaboration on documents, synchronizing calendars, and sharing in chat, but does not use Teams for PSTN calling, then you’re not using Teams to its full potential. Businesses wanting to add PSTN calling for their Teams users have several options:

Cloud-based PBX from Microsoft 

Microsoft Phone System is a cloud-based PBX phone system that integrates with Microsoft Teams. Microsoft took the complicated and expensive equipment required at your office location to bridge your VoIP calls with the PSTN and made it a subscription service in the cloud. With a Phone System License per user, you can use Microsoft Teams exactly like you use your regular phone—and do it from any device running Teams and from anywhere in the world as long as you have internet access. It allows users to make, receive, and transfer calls from any device using their Teams app or a compatible phone.

For businesses wanting to gain the benefits of cloud technology and integrate their business voice communications with Teams, Microsoft Phone System can be a viable option. Here are the top pros and cons for the Microsoft Phone System that should be considered before making a decision:

Microsoft Phone System Pros

Microsoft Phone System Cons

  • It reduces hardware dependency and maintenance costs by eliminating the need for on-premise PBX hardware
  • It offers scalability and flexibility as users can add or remove phone numbers and features as needed
  • It enhances collaboration and productivity by allowing users to access voice, video, chat, and file sharing from one platform
  • It provides security and reliability by using Microsoft’s cloud infrastructure and encryption
  • Requires comfort with Microsoft PowerShell
  • Provides basic call control features vs. PBX skills-based routing and contact center
  • It may incur higher monthly recurring charges proportional to the number of user seats and minutes used compared to UCaaS 
  • It may have compatibility issues with some legacy on premise physical integrations (over-head paging, faxing, etc.) or third-party applications that are not supported by Teams 
  • No ability to send or receive SMS texts 
  • Reliant on Microsoft Support 

Microsoft Direct Routing

For businesses heavily invested in on-premise PBX hardware, the migration to a pure cloud-based PBX is a drastic change. In some cases, the business might view the on-premise PBX as a sunk cost that still hasn’t been paid off or have IT support teams who would require extensive retraining and phone systems that cannot be taken offline for any length of time without significant business disruptions. These businesses can still connect their on-premise phone hardware to Microsoft’s cloud PBX using Direct Routing.

Microsoft Direct Routing allows customers to connect their on-premise PBX hardware to an internet-based virtual phone line using a technology called Session Initiation Protocol (SIP) trunking. This combination of internet-based VoIP and on-premise hardware enables businesses to use their existing telephony infrastructure and provider to route PSTN calls through the Microsoft Teams app. Rather than a drastic “rip and replace,” businesses can use Microsoft Direct Routing to make Teams a true unified communication platform with full-featured voice capabilities. 

As with the pure cloud-based Microsoft Phone System option, there are pros and cons to using Microsoft Direct Routing:

Microsoft Direct Routing Pros

Microsoft Direct Routing Cons

  • It offers more flexibility and control over voice services than the Microsoft Phone System.
  • It can reduce costs by leveraging existing carrier contracts and on-premise hardware investments.
  • It can support complex scenarios such as hybrid deployments, analog devices, and third-party PBXs.
  • It requires additional configuration and management of a Session Border Controller (SBC) which is usually an on-premise or hosted third-party appliance.
  • It may not be available or supported in some regions or countries. 
  • It may have compatibility issues with some SIP trunk providers or features. 

The Costs Associated with PSTN Calling in Microsoft Teams 

Even if you plan on using the Microsoft Direct Routing option to add PSTN calling features to Microsoft Teams, you will still need to add a Microsoft Teams Phone Standard license for every user. As of the writing of this blog post, a Microsoft Teams Phone Standard license retails for $8 per user/per month for all Microsoft 365 plans except for E5 (the most expensive enterprise plan). Phone Standard licenses are required to connect Teams users to the PSTN but do not include a phone number for the user and have no “minutes” of service included. A Microsoft Teams Phone with Calling Plan combines the Standard license with 3,000 minutes to call U.S. phone numbers for $15 per user/per month. 

For many Microsoft Direct Routing customers, their existing plans of phone minutes are carried over with Teams. Depending on the number of users and minutes, Direct Routing can save businesses a lot of money compared to the Teams Phone with Calling Plan. Additionally, the Direct Routing option enables the flexibility of deploying international calling to specific Teams users. For example, employees in your sales and support departments might need to call customers in Europe or Latin America in Teams, while your finance and marketing users need only call domestic phone numbers. On top of this mix-and-match capability, Direct Routing also provides businesses with the ability to shop around and “bring your own carrier” (BYOC) to get the best minute rates.

Using Microsoft Operator Connect to Add PSTN Capabilities 

Speaking of BYOC, Microsoft Operator Connect is a new managed service program that makes it simple to bring your own phone operator into Teams—as long as that PSTN operator is participating in the program. 

One of the key benefits of using Microsoft Operator Connect is the ability to leverage existing operator contracts. This means that you can keep your preferred operator and contracts while enabling a modern phone calling experience in Teams. Because the carrier must preconfigure PSTN connectivity into Microsoft’s infrastructure to comply with the Operator Connect program, it can take just minutes to connect your company’s Teams deployment to your operator and assign phone numbers to users. Operator Connect enables most of this user setup as drop-down menus accessed by authorized IT managers from inside the Microsoft Teams Admin Center web panel. A key advantage of Operator Connect is cost, with many providers offering flat-rate plans for domestic calling without the need to manage minutes. 

Operator Connect also provides operator-managed infrastructure. PSTN calling services and the required SBCs are managed by operators, saving on hardware purchase and management. Delivered as a managed service, Operator Connect provides enhanced support and reliability. Depending on your business needs and current carrier contracts, Operator Connect can be a viable PSTN-to-Teams deployment option

Adding PSTN Calling to Teams from a UCaaS provider 

Over the past decade or so, an increasing number of businesses large and small have adopted UCaaS as their phone systems. There are several companies with their own proprietary cloud-based UCaaS platforms. Even before the pandemic, many organizations were choosing to replace their on-premise phone systems with UCaaS providers—but the pandemic drastically accelerated UCaaS adoption. 

All the top UCaaS providers have their own dedicated software application for users to connect to their cloud-based platform. These apps work on all major operating systems’ devices and enable PSTN phone calling, instant messaging, voice conferencing, and virtual meetings between UCaaS users in the organization. However, just as the pandemic accelerated UCaaS adoption, it also accentuated the flaws of having a separate UCaaS app for business collaboration when Microsoft Teams already did that (in most cases) better. 

Every major UCaaS provider now offers the ability to connect their platform with Microsoft Teams to enable PSTN calling. There are several different ways the UCaaS provider’s PSTN calling features integrate with the Teams app: some offer a pretty seamless integration with Teams and some require the UCaaS dedicated app to “pop up” when making a Teams call. But adding PSTN calling to Teams from a UCaaS provider will require your internal IT department to carefully plan the deployment and subsequent training for employees.

GreenPages Enables PSTN Calling in Microsoft Teams 

The bottom line is that adding PSTN calling to Microsoft Teams can either be a mostly DIY project or delivered as a managed service. No matter what option you choose, GreenPages can help. We can seamlessly integrate PSTN calling into your Microsoft Teams on your terms and on your timetable. We bring a team of engineers, project managers, service delivery experts, and world-class technology partners to the table—empowering you with agile pure cloud, Direct Routing, Operator Connect, and UCaaS provider options that easily scale to meet your business needs.​ 

Let us optimize your investment in Microsoft 365 and Teams with a future-proof integrated phone solution that empowers your employees to collaborate with confidence.  

Kurt Karshick.

Kurt Karshick

Director of Carrier Services

Kurt Karshick is the Director of Carrier Services at Blue Mantis. During his venerable career in sales, Kurt has established trust with executive teams by identifying and advising digital transformation strategies for unified communications and cloud-based as-a-service solutions.