With the PSTN and ISDN switch-off underway, every business still running traditional phone lines has to move to some form of VoIP. Most default straight to a dedicated VoIP provider without pausing to ask whether Microsoft Teams Phone — a calling add-on for Microsoft Teams — might actually be the simpler fit, particularly for a business that already lives in Teams for chat and meetings all day.
Neither option is universally right. This is a genuine comparison, not a case for one over the other.
What Teams Phone Actually Is
Teams Phone adds a proper business phone system into Microsoft Teams — a phone number, the ability to make and receive external calls, call transfer, voicemail, and auto-attendant features, all inside the same app your staff already use for meetings and messages. For a business already on Microsoft 365, it's typically an add-on licence on top of an existing subscription, sometimes paired with a calling plan or a separate SIP trunking provider depending on the setup.
Where Teams Phone Wins
- One app, not two. If your staff already spend the day in Teams for chat and meetings, adding calling to the same interface removes the need to open, learn and maintain a completely separate phone app.
- Unified presence. A colleague's Teams status — in a meeting, available, do not disturb — is already visible and consistent, rather than needing to be duplicated in a separate phone system.
- Simpler licensing for Microsoft-heavy businesses. One vendor relationship, one admin console, potentially simpler billing, for a business already deep in the Microsoft ecosystem.
- Familiar admin tools. IT teams already managing Microsoft 365 don't need to learn an entirely separate platform's administration model.
Where a Dedicated VoIP Platform Wins
- Contact centre and advanced call handling. Businesses with serious call volume — inbound sales, support desks, anything needing sophisticated queuing, reporting and call analytics — often find dedicated platforms more mature in this specific area.
- Physical desk phone flexibility. While Teams supports certified desk handsets, the range and flexibility of hardware compatible with dedicated VoIP platforms is generally broader.
- Businesses not standardised on Microsoft 365. If your business runs Google Workspace or a mixed environment, adding Teams Phone means introducing a Microsoft dependency purely for calling, which may not be the simplest path.
- Specific integrations. Some industry-specific CRM or practice management software integrates more directly with established VoIP platforms than with Teams Phone.
The migration timing matters: With the PSTN switch-off deadline approaching, the decision doesn't need to be perfect — it needs to be made in time for a properly planned migration rather than a rushed one. Both options require enough lead time to port numbers, test call quality, and train staff before old lines are switched off.
Cost Comparison Isn't Always Straightforward
On paper, Teams Phone can look cheaper for a Microsoft-standardised business, since it adds to a licence you already hold rather than introducing an entirely new subscription. But the real comparison needs to include calling plan costs (which vary depending on call volume and destinations), any required desk hardware, and the admin and support overhead of each option — not just the headline per-user price.
Dedicated VoIP providers, meanwhile, often include more inclusive calling bundles and more predictable per-user pricing, which can work out more cost-effective for businesses with heavy call volumes, even after accounting for running it as a separate system.
How to Decide
- How Microsoft-centric is the business already? Heavy Teams users get more marginal benefit from Teams Phone than businesses using Teams only lightly.
- How call-heavy is the role? A reception or sales team on the phone all day has different needs to an office where most communication happens over chat and email, with calls as an occasional extra.
- What does the call volume and complexity actually look like? Simple inbound/outbound calling suits either option well; complex call routing and reporting leans toward dedicated platforms.
- What hardware does the business actually want? If desk phones matter to your team, check hardware compatibility before committing either way.
Questions worth asking your IT provider: Given how Microsoft-centric our business already is, does Teams Phone genuinely simplify things or just add complexity to an existing platform? What would our realistic monthly cost be under each option, including hardware and calling plans? How much lead time do we have before our current lines are switched off?
The Bottom Line
There's no universally correct answer here — it depends on how your business already works day to day. What matters is making the comparison properly, on your business's actual usage and existing tooling, rather than defaulting to whichever option your current provider happens to sell.