Error Sorry

Cart Total


  • Your shopping cart is empty


Delete everything ?

How to Use Microsoft Teams as a Business Phone System

How to Use Microsoft Teams as a Business Phone System


8 min read

Blog Articles

Quick Summary

With the right Microsoft licenses, Microsoft Teams can be used as a business phone system, though it may not suit the needs of larger businesses.

Can I just Download Teams and Get Started?

Microsoft Teams itself is free for anyone to download, whether or not they have a paid Microsoft license. When you download Microsoft Teams for the first time you’ll find there’s an awful lot it can do without the need for purchasing any additional licensing from Microsoft, but functionality will be limited to non-existent when it comes to integrating with other Microsoft services and, most importantly, making or receiving external calls (from actual phone numbers) when using Teams.

This is because, by default, Microsoft Teams acts much like Skype for Business. Calls made within Teams are initially restricted to internal calls, i.e. calls made from one virtual Teams user to another. For calls between members of your staff, then, Microsoft Teams is great. If you want to perform what is known as a ‘PSTN breakout’, however, and start making calls to your clients’ phone numbers, or receiving calls to your business phone numbers from customers and answering within Teams itself, then you’ll need to purchase additional licenses.


There are lots of options available when it comes to Microsoft licenses and Teams is available on all of them. Where do you start?

What Licenses Do I Need?

In order to begin using Microsoft Teams as a business phone system, you’ll need to purchase a Microsoft business or enterprise license first. From there, you’ll need the Microsoft Phone System license. This adds basic phone system functions with which you can begin building a simple phone system. These functions include a single-layer auto-attendant (as opposed to multi-layered, moving from one ‘press 1, press 2’ option to another), basic call queue functionality and call forwarding.

If you want to conduct conference calls, you’ll be able to do this on an ‘ad hoc’ basis from an ongoing, 1-to-1 phone call with the addition of Microsoft’s Audio Conferencing license.

Finally, in order to actually make external calls, you’ll need to purchase a call plan.

For more information on Microsoft’s licensing, including pricing, see Microsoft Teams Licensing Explained. See, What Is Microsoft Teams Phone System, for more information on Microsoft’s Phone System capabilities.

In the UK and over 70 other countries, all three of these requirements are met by a single license: Microsoft Business Voice. This is exclusively available as an add-on for those who have an existing Microsoft Business license. If instead, your business has an Enterprise license such as Microsoft 365 E3 or E5, then things are a little different.

With E3, you’ll need to purchase each of the licenses separately. With E5, Phone System and Audio Conferencing licenses are included, so you’ll only need to purchase a call plan.

Call plans vary by region, but in the UK the most inclusive call plan offered includes either 1200 domestic minutes or 600 international minutes per user per month. Whichever is reached first. Call minutes are pooled by user, meaning if User One uses only 600 domestic minutes but User Two uses 900 before the end of the month, User Two can tap into User One’s unused minutes.


Microsoft Teams can make internal business communications easy no matter where you're working from. But how about external calls?

Microsoft Phone System: What’s best for small businesses?

For small businesses, the above configuration could work just fine. So long as your requirements of a business phone system when it comes to features and call plan allowances aren’t too great, then this could work well for you. If you’re unsure where you sit, there’s no harm in trialling Microsoft Phone System and trying to create your existing business phone system with it. After testing, see if you’re losing any functionality you can’t do without. If you are, then you’ll need another solution (see below).

Teams Direct Routing: What’s best for big businesses?

Large businesses and enterprises that need to build a phone system that mirrors their company’s departmental structure, with efficient but often complex routing options in place to give the customer the highest quality caller experience possible, are likely to find themselves struggling with Microsoft Phone System.

Its feature-set is limited, lacking call recording and the concept of hunt groups, for example. Whilst many features are listed on the Microsoft documentation for its Phone System, lots of them are much more limited than those features offered by most dedicated business phone system providers.

We encourage you to give Microsoft Phone System a go, though. If your IT admins are able to build you the phone system you want, then you’ve lost nothing. If, however, you run into trouble as we predict, there are some options available to you.

For more on the shortcomings of Microsoft Phone System, see Teams Direct Routing vs Microsoft Phone System.

Teams Direct Routing

Yay.com's Direct Routing solution will power up your phone system for as little as £11.99 per user.

If you and your team are deeply embedded in the Microsoft ecosystem and you’re sure to continue using their products, even if you have to spend more to get the business phone system you need, then Direct Routing for Microsoft Teams is the best option for you.

Essentially, this option allows you to replace Microsoft Phone System in the back-end with a third-party’s phone system. This opens you up to all the phone system configuration options and features that Microsoft’s Phone System lacks.

However, adding functionality to your phone system is the only thing that will change. In the front-end, your staff will continue to interface with the Teams GUI, preserving the user experience they’re used to. This means you won’t have to spend any more time training your staff to use another set of software. Your staff won’t know anything’s changed, but your IT admins will have an easier time managing and maintaining your business phone system while your customers get the high-quality caller experience they deserve.

Yay.com offers its own Teams Direct Routing solution for companies of this type starting at just £11.99 per user.  If you need a more powerful phone system plugged into Microsoft Teams, Yay.com has what you need. We offer all the features you need to give your callers the experience they deserve whilst giving you the freedom to use the popular Teams platform.


If Microsoft Phone System doesn't meet your business' requirements, a Teams Direct Routing solution could be just what you need.

Use Another UCaaS Provider

The second option available to you is more relevant if you haven’t yet purchased a Microsoft license or are only considering using Teams at this stage. All Microsoft licenses have a one-month free trial available, so we encourage you to try their products and services out to make your own judgments, but if you feel that the limitations of Microsoft’s Phone System remove Teams as a viable solution for you, then you can look to a third-party to provide you with a unified communications solution.

Many of the features available with Microsoft Teams are available in forms just as impressive in platforms developed by other providers. A good UCaaS solution will provide its users with business instant messaging, video conferencing, phone system features and file-sharing abilities, all with enterprise-grade security. Whilst these solutions won’t integrate as tightly as Teams with other Microsoft products and services like Outlook, Onedrive and Sharepoint, they may provide you with a less shackled experience, allowing you to pick and choose the best tools for the job without feeling forced to use the products of a single developer.

If you prefer Evernote as a business tool for making and keeping notes and research documents, for example, you may feel forced to use Microsoft’s OneNote simply as a result of having an existing Microsoft License. Breaking free from a product ecosystem has its benefits and, this way, you may find yourself with a more powerful productivity suite built out of the best the market has to offer, rather than going with a one-company solution simply because you feel locked-in.

Yay.com is proud to offer a unified communications platform that puts the control firmly back in the customers' hands and, with our five-star rated customer support team, we’re always here for you if you get stuck or need any advice on how to configure the best phone system experience for your clients, customers and staff. Our platform was built as a business phone system first, so is massively feature-rich, offering cloud-synced, unlimited call recording, multi-level IVR call menus and an open API and webhooks so you can integrate our platform seamlessly with your own systems and CRMs. With business instant messaging available via our desktop and mobile apps, too, your staff can communicate and collaborate fluidly and effectively no matter where they’re working from.

How to Use Microsoft Teams as a Business Phone System

In this Category

See More
3 Ways Microsoft Teams is Letting Down Your Business
3 Ways Microsoft Teams is Letting Down Your Business

Microsoft Teams phone system is not a great solution for businesses. Direct Routing with a third party service offers businesses the perfect compromise.

Posted April 7 2022 | 7 min

How to Create a Team in Microsoft Teams
How to Create a Team in Microsoft Teams

In Microsoft Teams new teams can be created both within the app and from the Teams Admin Center. Also, learn the difference between Teams and 365 Groups.

Posted March 11 2022 | 5 min

How To Set Up A Conference Call in Microsoft Teams
How To Set Up A Conference Call in Microsoft Teams

Set up a dedicated conference bridge number in Microsoft Teams to conduct conference calls between users. Invite external users with Teams Direct Routing.

Revised February 10 2022 | 7 min

Microsoft 365 Business Voice Without Calling Plan
Microsoft 365 Business Voice Without Calling Plan

Can Microsoft 365 Business Voice be purchased without a calling plan? How and where can you purchase Business Voice without a calling plan?

Revised November 26 2021 | 5 min

Why Use Microsoft Teams Instead of Email?
Why Use Microsoft Teams Instead of Email?

Microsoft Teams combines a multitude of communication mediums to help members of your team collaborate effectively.

Posted September 29 2021 | 6 min

Microsoft Teams Licensing Explained
Microsoft Teams Licensing Explained

A comprehensive explanation of Microsoft's wide array of licensing options for users of Microsoft 365 and Microsoft Teams.

Revised August 24 2021 | 13 min

Which VoIP Phones Are Supported by Microsoft Teams?
Which VoIP Phones Are Supported by Microsoft Teams?

What brands and models of IP phone is Microsoft Teams compatible with and why does Teams restrict the devices which can be used with it?

Posted April 15 2021 | 4 min

What Is Microsoft Teams?
What Is Microsoft Teams?

We discuss what Microsoft Teams is, who it's for and what alternatives are available to those who need more from a unified communications solution.

Posted March 18 2021 | 8 min

Is Microsoft Teams Free to Use?
Is Microsoft Teams Free to Use?

We discuss whether Microsoft Teams is free to use and what functions can only be used with paid licenses.

Posted March 5 2021 | 6 min

Microsoft Phone System Vs Teams Direct Routing
Microsoft Phone System Vs Teams Direct Routing

Discover the limitations of Microsoft Phone System and why a Teams Direct Routing solution is the best option for big businesses.

Posted February 3 2021 | 9 min

What Is Microsoft Phone System?
What Is Microsoft Phone System?

We explain what Microsoft Phone System is and how it makes it possible to get Microsoft Teams making calls to the outside world from anywhere.

Posted February 3 2021 | 9 min

Article By

Alex - Content Manager at Yay.com


Content Manager at Yay.com

ISO 27001 Business Continuity Accreditation ISO 22301 Business Continuity Accreditation Cyber Essentials Certificate of Assurance G-Cloud accredited by the Crown Commercial Service
ISO 27001 Business Continuity Accreditation ISO 22301 Business Continuity Accreditation Cyber Essentials Certificate of Assurance G-Cloud accredited by the Crown Commercial Service