Teams Phone Licensing — Pick Your Path — Free Mind Map
Visual decision tree for Microsoft Teams Phone licensing — when you already have E5, when to buy the add-on. Free mind map.
Teams Phone is two decisions, not one. First: do I have the right base licence? Second: how do calls reach the public phone network?
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Frequently Asked Questions
Do I need the Teams Phone add-on if I have M365 E5?
No. Microsoft 365 E5 (and Office 365 E5) include Teams Phone Standard at no extra cost. You still need to choose a PSTN connectivity option to make external calls — Calling Plan, Operator Connect, or Direct Routing — but the PBX licence is included.
What's the difference between Calling Plan, Operator Connect, and Direct Routing?
Microsoft Calling Plans — Microsoft is your phone carrier. Easiest setup, available in select countries. Operator Connect — your existing telco partners with Microsoft to provide PSTN calling, managed in the Teams Admin Center. Direct Routing — you connect your own Session Border Controller (SBC) to bring your existing carrier into Teams. Most flexibility but most complex.
Which option is right for my org?
If you're in a Calling Plan country and want simple billing, go Calling Plans. If you have an existing carrier you like, check if they're in the Operator Connect programme — you keep them and get Teams integration. If you have very specific telephony requirements (regulated industries, complex routing, on-prem PBX integration), Direct Routing gives you full control but needs SBC expertise.
What does Teams Phone Standard actually do without PSTN?
Without a PSTN option, Teams Phone Standard only enables internal-to-internal calls between Teams users in your tenant — basically VoIP between colleagues, plus voicemail, call queues, auto attendants, and call forwarding/transfer between Teams users. To call any external phone number, you need one of the three PSTN options.