Microsoft Teams Phone Licensing

Comparing telephony costs is typically the first step for organizations considering using Microsoft Teams as a phone system, but determining the licenses required to use Teams as a phone system, can be daunting. There are many options, but as a starting point, your license purchases will depend on what you already own.

Fewer than 300 users in your organization? Skip to the Too Long, Didn’t Read (TLDR) 

3 Components of Teams as a Phone System

There are three components to Teams as a phone system. The first requirements are simple enough: a Teams license and a Teams Phone license. You’ll need to purchase these if you don’t already own them. The third component, a dial tone provider, is a bit more complicated.

Teams Included

The following bundles include a Teams license:

• Microsoft 365 F1
• Microsoft 365 F3
• Microsoft 365 Business Basic
• Microsoft 365 Business Standard
• Microsoft 365 Business Premium
• Microsoft 365 Enterprise E3
• Microsoft 365 Enterprise E5
• Office 365 Enterprise F3
• Office 365 Enterprise E1
• Office 365 Enterprise E3
• Office 365 Enterprise E5

If you don’t already have one of the above, you’ll need a Teams Essentials or Teams Enterprise license.

Teams Phone

The following bundles include a Teams Phone license:

• Microsoft 365 Enterprise E5
• Office 365 Enterprise E5

If you don’t already have one of the above, you’ll need a Teams Phone Standard license.

Dial Tone Provider

The licenses already mentioned will allow Teams to work as a phone system but won’t connect the phone system to the outside world. The Teams license by itself allows users to call each other, and the Teams Phone license adds typical phone system features including voicemail, call forwarding, and caller ID. However, users still need a way to make and receive calls outside the organization.

The dial tone provider creates that connection to the outside. There are two basic options for a dial tone provider, Microsoft or a third-party.

Option 1 – Microsoft 

Microsoft can serve as the dial tone provider directly. This is the simplest method, as it’s a single vendor with a single invoice and (mostly) uncomplicated offerings. To use Microsoft as the dial tone provider, you’ll purchase either a domestic calling plan or an international calling plan for each user.

The domestic calling plan allows for unlimited inbound calls and 3,000 outbound minutes per user per month, pooled across the organization. That is, if you have 100 users, the organization will get 100 x 3,000 minutes = 300,000 total outbound minutes. Outbound international calls would be pay-as-you-go on a per-minute basis.

The international calling plan allows for unlimited inbound calls, 3,000 outbound domestic minutes per user per month, and 600 outbound international minutes per user per month, again pooled across the organization.

Note that you can mix and match calling plans if only some users will make frequent international calls. In this case, the pooled minutes are by group. For example, if 10 users have a domestic calling plan and 5 users have the international calling plan, you would have 45,000 (15 x 3,000) domestic minutes pooled across all 15 users and 3,000 (5 x 600) international minutes pooled across the 5 users with the international plan. In this example, if a domestic plan user makes an international call, charges would accrue on a per-minute basis.

Option 2 – Third-Party

Another option is to eschew Microsoft as the dial tone provider in favor of a third-party provider. In this case, the organization should go through a sales cycle with other providers, each of which will have different offerings and pricing plans. While this option is more complex, it can save money for some organizations, depending on their use case and overall utilization.

License Pricing and Bundles

Note that the prices and bundles below are for US customers and require an annual subscription. Month-to-month options are typically available at a higher price point. The pricing below is the current standard price, with current promotional pricing displayed in parentheses. Promotional pricing is typically valid for the first year.

Once you have determined the additional licenses required, you can determine the costs using the prices listed below (based on price to purchase independently /current as of original post publication).

• Teams Essentials – $4/user/month
• Teams Enterprise – $5.25/user/month
• Teams Phone Standard – $8/user/month
• Calling Plan (domestic) – $12/user/month for 3000 minutes
• Calling Plan (international) – $24/user/month for 3000 domestic minutes and 600 international minutes

The bundles below are intended for organizations with less than 300 users, and typically offer a less expensive alternative to purchasing the individual components.

• Teams Essentials and Teams Phone – $12/user/month (Promotion at $8/user/month)
• Teams Essentials and Teams Phone with pay-as-you-go calling – $15/user/month (Promotion at $10/user/month)
• Teams Essentials and Teams Phone with Calling Plan (domestic) – $20/user/month (Promotion at $16/user/month)
• Teams Essentials and Teams Phone with Calling Plan (international) – $36/user/month
• Teams Phone with Calling Plan (domestic) – $15/user/month
• Teams Phone with Calling Plan (international) – $32/user/month