VoIP and Microsoft 365: Integrating Calling with Teams

How VoIP Integrates with Microsoft 365

As part of our business VoIP resource centre, this guide explains how Microsoft 365 and VoIP telephony come together to replace traditional business phone systems with a unified, cloud-based solution. Microsoft 365 Business plans include Microsoft Teams, which already handles internal calling, video meetings, and team chat for millions of organisations worldwide. Microsoft Teams has over 320 million monthly active users globally (Microsoft 2024), making it the most widely deployed business collaboration platform in the world. The missing piece for most businesses is external calling — the ability to dial a standard UK phone number and receive calls from clients and contacts on their business number. This is where Teams Phone comes in.

Teams Phone adds a PSTN (Public Switched Telephone Network) calling layer to Microsoft Teams. Once enabled, staff can dial any UK or international number directly from the Teams interface, receive calls to their business number on Teams, and manage calls, voicemail, transfers, and call queues through the same application they already use for internal communications. There is no separate phone app to install or learn, and no additional hardware is required beyond the devices staff already use — PCs, laptops, smartphones, or optional IP desk phones.

Understanding the Teams Phone Architecture

To appreciate how VoIP integrates with Microsoft 365, it helps to understand the underlying architecture. Microsoft Teams handles all internal communication natively — Teams-to-Teams calls, video meetings, and messaging travel over the Microsoft cloud network without any telephony infrastructure. Adding external calling capability requires connecting Teams to the public telephone network, and there are three ways to achieve this.

Microsoft Calling Plans

Microsoft Calling Plans is Microsoft's own phone number and call routing service. You purchase phone numbers and calling minute bundles directly from Microsoft as part of your Microsoft 365 licensing. Setup is straightforward — numbers are provisioned through the Teams admin centre and calling capability is activated within hours. However, Microsoft Calling Plans are typically more expensive per minute than third-party carriers, offer limited geographic number availability in the UK, and number porting from an existing provider can be slower than the alternatives.

Direct Routing

Direct Routing connects Microsoft Teams to a third-party SIP trunk provider — such as the carrier your business already uses, or a new provider selected by AMVIA. Your existing phone numbers are ported to the SIP provider and calls are routed through Teams via an Azure-certified Session Border Controller (SBC). The SBC acts as the bridge between the Microsoft cloud and the telephony carrier's network, handling call setup, security, and media conversion.

Direct Routing typically offers lower per-minute call costs, greater flexibility in carrier selection, and faster number porting than Microsoft Calling Plans. It is the preferred approach for UK businesses with existing geographic numbers, complex call routing requirements, or high call volumes where carrier cost matters. AMVIA manages the Session Border Controller and SIP carrier relationship on your behalf as a fully managed service.

Operator Connect

Operator Connect is a newer model that simplifies the Direct Routing approach. A Microsoft-certified operator — AMVIA is one — provides calling capability directly through the Teams admin centre without the business needing to manage SBC infrastructure. Numbers are assigned and calling configured within Teams administration. Operator Connect provides the cost benefits of a third-party carrier with the simplicity of Microsoft Calling Plans.

Microsoft 365 Licensing for Teams Phone

Teams Phone requires a Phone System licence, which is an add-on to your existing Microsoft 365 subscription. The licence costs approximately £8 per user per month and is required for every user who needs external calling capability. Users who only need internal Teams calling, video meetings, and messaging do not require the Phone System add-on.

The Phone System licence is included as standard in Microsoft 365 E5 plans, but must be added separately to Business Basic, Business Standard, Business Premium, E1, and E3 plans. For businesses not currently on E5, the total cost of Microsoft 365 licensing plus Phone System add-on is still typically lower than maintaining a separate phone system alongside Microsoft 365. AMVIA reviews your current licence estate and advises on the most cost-effective configuration.

Why This Integration Matters for UK Businesses

Integrating VoIP with Microsoft 365 simplifies your entire IT stack. Instead of maintaining a separate phone system alongside Microsoft 365 — with its own management portal, its own user accounts, its own support contract, and its own hardware — everything lives in a single platform. Call history integrates with Teams chat history. Voicemail arrives in your Teams inbox alongside messages and notifications, with automatic transcription so you can read messages without listening to them. Contacts synchronise from Outlook. Calendar integration shows your availability status to colleagues automatically.

For businesses already deeply embedded in Microsoft 365 — using Outlook for email, Teams for collaboration, SharePoint for documents, and OneDrive for file storage — removing a separate phone system reduces complexity, lowers total cost, and eliminates the friction of switching between disconnected applications. Staff have one application to manage rather than two, one set of credentials rather than two, and one mobile app rather than two.

The UK PSTN switch-off is scheduled for completion by January 2027 (Openreach/BT), and over 2 million UK businesses still rely on PSTN/ISDN lines (Ofcom estimates). For businesses already on Microsoft 365, Teams Phone is often the most cost-effective and integrated migration path — eliminating both ISDN lines and the separate phone system in a single transition rather than replacing one legacy system with another.

Features Available Through Teams Phone

Once Teams Phone is enabled with PSTN connectivity, the following capabilities are available to UK businesses:

• Inbound and outbound calling: Make and receive calls to any UK, mobile, or international number directly within Teams on PC, Mac, iOS, or Android.
• Auto-attendant: Automated greeting and menu system that routes callers to the correct department or individual — configured through the Teams admin centre.
• Call queues: Incoming calls queued and distributed to groups of agents based on configurable routing rules — simultaneous ring, round-robin, or longest idle.
• Voicemail with transcription: Voicemail messages delivered to Teams and Outlook with automatic transcription, making them searchable and readable.
• Call transfer and conferencing: Warm and blind transfers, call hold, call park, and the ability to escalate a call to a multi-party conference or video meeting.
• Call recording: Automatic or on-demand call recording for compliance, training, or quality assurance — with recordings stored in Microsoft's cloud.
• Presence integration: Your availability status in Teams — available, busy, in a meeting, away — is visible to colleagues before they attempt to call you.
• Desk phone support: For users who prefer a physical handset, Teams-certified IP desk phones from Yealink, Poly, and AudioCodes provide a traditional phone experience connected to the Teams platform.

Key Considerations for UK SMEs

• Verify your Microsoft 365 licence tier: Confirm that your current Microsoft 365 plan supports the Teams Phone add-on, and budget approximately £8 per user per month for the Phone System licence.
• Choose the right PSTN connectivity method: Direct Routing and Operator Connect typically offer better value and flexibility than Microsoft Calling Plans for UK businesses. AMVIA can compare the total cost of each approach based on your actual call volumes.
• Plan number porting carefully: Porting existing geographic numbers to a Teams-compatible SIP carrier typically takes 7 to 14 working days. Coordinate the cutover date to minimise disruption — ideally scheduling the port completion for a low-traffic period.
• Assess your internet connection: Teams calls require a stable, low-latency internet connection with adequate bandwidth. Each concurrent call uses approximately 80–100 Kbps. AMVIA assesses your connectivity before migration to confirm it will support your peak call volumes.
• Map your existing call flow: Document your current auto-attendant menus, hunt groups, DDI allocations, and voicemail configuration before migration. Teams Phone can replicate this functionality, but it needs to be configured correctly during setup.

How AMVIA Can Help

AMVIA configures and manages Microsoft Teams Phone for UK businesses — whether through Direct Routing, Operator Connect, or Microsoft Calling Plans. AMVIA's managed service includes Session Border Controller management, SIP carrier selection, number porting, auto-attendant and call queue configuration, staff training, and ongoing UK-based support. AMVIA also handles Microsoft 365 licensing, ensuring you have the right Teams Phone add-on for the right users at the right cost. Call 0333 733 8050 to discuss how Teams Phone can replace your current phone system.