If your team already lives in Microsoft Teams, it is natural to ask whether Teams can be your phone system too. It can, but it is not the only way to get business calls into Teams, and it is not always the best fit. This guide compares Microsoft Teams calling vs a hosted phone system in plain English, so you can decide what suits a UK business of 10 to 50 people.
With the UK’s analogue and ISDN lines being switched off by 31 January 2027, plenty of businesses are making this choice right now. Here is what you need to know.
What “Teams calling” actually means
Out of the box, Microsoft Teams lets colleagues call each other over the internet. Calling ordinary phone numbers, and having your own business number ring in Teams, is a separate thing. Microsoft calls it Teams Phone.
According to Microsoft, Teams Phone is always an add-on licence. It is not included as standard in Microsoft 365 Business Basic, Standard or Premium. Every user who makes or receives outside calls in Teams needs:
- A Teams Phone licence, added on top of your Microsoft 365 or Teams subscription, and
- A way to connect to the phone network. Microsoft offers its own Calling Plans, or you can use a third-party provider through Operator Connect or Direct Routing.
Microsoft also sells a “Teams Phone with Calling Plan” bundle for business subscriptions. Prices and availability change, so check the current figures with Microsoft or your reseller before comparing.
What a hosted phone system is
A hosted phone system (sometimes called hosted PBX, cloud phone system or VoIP) is a complete business phone system run in the cloud. It is built for handling calls: ring groups, call queues, auto attendants (“press 1 for sales”), voicemail to email, call recording, hold music, reporting and desk phones.
Your staff can answer calls on a desk phone, a desktop app, a web browser or a mobile app, all using your business number. Platforms such as 3CX and FreePBX are common choices for small and medium businesses.
Microsoft Teams calling vs hosted phone system: side by side
1. Who it is designed for
Teams Phone is designed for people who spend their working day in Teams and mostly make and take their own calls. A hosted phone system is designed around the call itself: getting it to the right person, queuing it if everyone is busy, and making sure nothing is missed.
2. Handling incoming calls
If your phone rings a lot, with customers, patients, clients or suppliers calling in, call handling matters more than anything else. Ask how each option handles:
- Several people ringing at once, or in turn
- Callers waiting in a queue with messages and music
- Out-of-hours messages and holiday routing
- Reception staff transferring and parking calls quickly
- Reports on missed calls and waiting times
Teams Phone includes auto attendants and call queues, but they are set up in the Teams admin centre and can take some getting used to. A hosted phone system puts these features at the centre, and your provider usually sets them up for you.
3. Desk phones and reception
Not everyone wants to take calls through a laptop. Receptionists, warehouse staff, shop floors and shared spaces often work better with a proper desk phone. Hosted phone systems support a wide range of desk phones. Teams Phone is built around Teams-certified handsets, plus a limited list of compatible older-style phones, so check your choice of desk phone before you commit.
4. Licences and costs
With Teams Phone you pay for your Microsoft 365 licence, plus a Teams Phone licence, plus calling (a Microsoft Calling Plan or a third-party provider). Users who only need to answer the main line still need the full set.
With a hosted phone system you pay one per-user price that covers the phone system features. At Simplify Networks, plans start from £14.99 per user per month, with a one-off setup fee. You can mix plans too, for example desk phone users on one plan and staff who work on laptops and mobiles on another.
5. Keeping your numbers
Both routes let you bring your existing numbers. When you move to a Simplify Networks hosted phone system, transferring your numbers is free, so customers keep calling the numbers they already know.
6. Who supports it
If something goes wrong with Teams Phone, your IT person or Microsoft partner usually picks it up, alongside everything else they look after. With a hosted phone system, your phone provider supports the phones, and you have one place to call when a number, queue or handset needs changing.
You don’t have to choose: hosted phone system with Teams integration
For many small businesses the answer is both. A hosted phone system can connect to Microsoft Teams, so staff who live in Teams can make and take business calls there, while reception keeps a desk phone and the full call-handling features stay in the phone system.
Our Business User plan includes Microsoft Teams integration, alongside desktop, mobile and web softphones, SMS, voicemail, call transfer and chat. One thing to know: if staff make and take outside calls inside the Teams app itself, Microsoft still requires a Teams Phone licence for those users, even when the calls run over your own phone provider. We will check your licences and tell you exactly what you need before you commit.
Which is right for your business?
Teams Phone on its own may suit you if:
- Most of your staff already work in Teams all day
- You get relatively few incoming calls from customers
- You have IT support who is comfortable managing Teams voice settings
A hosted phone system is usually the better fit if:
- Your phone is a key way customers reach you
- You need a receptionist, call queues or “press 1 for…” menus
- Some staff need desk phones, and others need a mobile app
- You want one simple per-user price and a phone provider to look after it
A hosted phone system with Teams integration suits businesses that want the best of both: strong call handling, plus calling from Teams for the people who want it.
Whichever route you take, plan it before the 2027 switch-off. Our guide to features you get when you leave your landline behind is a good next read, and you can find out how staff can use your office number on your mobile. If you are still on old phone lines, our PSTN switch-off guide explains what to do next.
New customers who sign up by 31 October 2026 get 50% off their first month (on the first month’s per-user charges).
Not sure whether Teams or a hosted phone system suits you?
Tell us how your team works and we’ll recommend the right setup, including Teams integration if you want it. New customers who sign up by 31 October 2026 get 50% off their first month.