Is Microsoft Teams Calling VoIP? | How Teams Phone Works

Is Teams Calling the Same as VoIP?

Microsoft Teams Calling uses Voice over Internet Protocol to transmit calls. When a Teams user makes a call — internal to a colleague or external to a UK phone number — that call travels as digital data packets over the internet, not as an analogue signal down a copper line. That is VoIP by definition, and it is the foundation of any business VoIP platform.

The distinction worth drawing is between internal Teams-to-Teams calls and external PSTN calls. Internal calls work over VoIP by default at no extra licence cost. External calls — to mobiles, landlines, or non-Teams phones — need a Teams Phone licence plus a PSTN connection method: a Microsoft Calling Plan or Direct Routing for Teams through a SIP carrier.

Microsoft's own documentation confirms Teams Phone runs on SIP and real-time media protocols — the VoIP stack — rather than legacy telephony. You can read the technical detail in Microsoft's Teams Phone documentation.

How Big Is Teams Phone as a VoIP Platform?

Teams Phone is now one of the largest cloud PBX platforms in the world, which matters when you are betting a phone system on a vendor's longevity. Microsoft has made Teams Phone its strategic cloud calling platform, and PSTN adoption has grown quickly among organisations already standardised on Microsoft 365.

Scale alone is not the whole story. An estimated 80 million Teams users have some form of calling capability enabled, but only around 6.25% have external PSTN calling switched on — meaning most organisations still run Teams alongside a separate phone system rather than as their main line. For competitive context, Zoom Phone has reached 7 million paid seats (as of Q3 2024).

The practitioner read: Teams Phone is proven at scale, but "we use Teams" rarely means "we make external calls in Teams." Closing that gap is the deployment work.

How Does Teams Phone Compare to a Traditional VoIP System?

Both Microsoft Teams Phone and a standalone hosted VoIP phone system use the same underlying VoIP technology. The differences are in packaging, integration, and where features like recording live.

If your organisation already lives in Microsoft 365, the case for VoIP with Microsoft 365 and Teams Phone is strong — one app for calls, chat, meetings, and files. If you need a dedicated phone platform with the least possible Microsoft dependency, a standalone hosted system may flex further.

Microsoft Calling Plans vs Direct Routing — Which Connects Teams to the PSTN?

There are two ways to connect Teams Phone to the public telephone network, and the choice drives your call costs and carrier flexibility. Calling Plans are the simplest; Direct Routing gives you control. Most UK businesses with real call volume land on Direct Routing.

Microsoft Calling Plans

Microsoft supplies PSTN connectivity directly. You buy a plan per user from Microsoft, which adds a UK number and inclusive minutes — domestic plans start from £5.95 per user per month. Everything runs through Microsoft's admin portal with no third-party carrier, which suits smaller teams that value simplicity over cost control.

Direct Routing

A certified Session Border Controller connects Teams Phone to SIP trunks from a carrier such as Gamma or BT. This gives you better call rates, easier number porting, and freedom to keep your existing carrier. Direct Routing is typically more cost-effective for higher call volumes — and it is the route AMVIA recommends for most multi-site UK businesses.

Does Teams Phone Support All Standard VoIP Features?

Teams Phone covers the features most businesses expect from a cloud phone system, with one notable exception around recording. The core call-handling toolkit is built into the Teams Admin Centre and the Teams client itself, so there is no separate phone-system console to manage.

• Auto-attendant — configured via Resource Accounts in Teams Admin Centre
• Call queues — inbound queuing with configurable routing and overflow
• Voicemail — cloud voicemail with transcription
• Call transfer and hold — standard in the Teams client
• Conference calling — integrated with Teams meetings
• Call analytics — in Teams Admin Centre and Power BI

The catch: call recording needs Teams Premium or a Microsoft-certified compliance recording partner — it is not in the base Teams Phone licence, unlike many hosted VoIP platforms where recording is included. Factor that cost in when you compare. Microsoft details the licensing tiers on the Microsoft 365 site.

Can I Keep My Existing Numbers When Moving to Teams Phone?

Yes — existing UK geographic and non-geographic numbers can be ported into Teams Phone, either through Microsoft's portal or through your Direct Routing carrier. Number porting typically takes 5–10 working days (typical UK 2026 range), and your old service should stay live until the port completes so you avoid downtime. UK number porting is regulated by Ofcom, which sets the rules carriers must follow.

Plan the port around your switchover, not the other way round. Test inbound and outbound calling on the new platform with a small pilot group before you cut the whole business across.

Is Teams Phone the Right VoIP Choice for Your Business?

Teams Phone is the right VoIP choice for organisations already running Microsoft 365 and Teams for day-to-day collaboration — calls, meetings, chat, and files in one interface is a genuine operational win. If you mainly need a standalone phone system with minimal Microsoft dependency, a dedicated hosted VoIP platform may offer more flexibility and better value.

AMVIA helps UK businesses decide between Microsoft Teams Calling and a dedicated VoIP platform — then handles the full, security-first deployment if Teams Phone is the right fit. One provider, accountable end to end.