Somewhere between the analogue switch-off and the Microsoft 365 bill, a reasonable question forms: we already live in Teams all day, so why not make it the phone system too? It is a genuinely good question with a genuinely split answer, because Teams Phone and dedicated hosted VoIP are both mature, both capable, and better at different shapes of business. The wrong way to decide is by brand loyalty in either direction; the right way is by how your business actually handles calls.
Here is the comparison that sorts it, with the costs and the migration paths attached.
What each one is
Teams Phone adds real phone calling (your business numbers, external calls, the works) to the Microsoft Teams your staff already use: an add-on licence per user, with call plans from Microsoft or your numbers connected through a carrier. One app for chat, meetings and now the phone; the cloud telephony mechanics underneath are the same as any hosted system.
Dedicated VoIP platforms are purpose-built hosted phone systems: richer native call handling out of the box, their own apps and desk-phone ecosystems, and pedigree in businesses where the telephone is the front door rather than one channel among several.
Both port your existing numbers, both work from anywhere, both retire the PBX. The differences live in three places: call-handling depth, cost structure, and where your staff already spend their day.
Where Teams Phone wins
One platform, one vendor, one app. Staff already in Teams get calling in the same window: no second app, no second login, and presence that actually reflects whether someone is on a call or in a meeting. For internal-collaboration-heavy businesses (professional services, project teams, hybrid offices), this coherence is the killer feature.
Licensing economics inside Microsoft. The add-on structure (Teams Phone licence per user, plus a calling plan or carrier connection) often lands cheaper than a parallel VoIP subscription for businesses already on Business plans, and it consolidates billing and administration into the tenancy you already manage.
Meetings-first culture fit. Where most “calls” are scheduled video meetings and external phone calls are the minority, Teams Phone treats your reality as the default rather than an add-on.
Where dedicated VoIP wins
Call-handling depth without fighting. Complex queues, wallboards, supervisor tools, sophisticated auto-attendants, call recording with granular policies: dedicated platforms do reception-desk and phone-team work natively and gracefully. Teams Phone has closed much of this gap (and closes more with contact-centre add-ons), but businesses with serious inbound call operations (bookings, dispatch, hospitality front desks, busy trade counters) still find the dedicated platforms less effortful at it.
Handset ecosystems and phone-first staff. Where the workforce wants physical phones on desks and walls (workshops, receptions, kitchens), dedicated platforms’ device ranges and management remain slicker.
Independence from the collaboration stack. A business not living in Teams (or mixing Google Workspace, or simply preferring separation between “the phones” and “the IT”) loses nothing by choosing the dedicated route.
The costs, side by side
Realistic UK shapes in 2026, ex VAT:
- Teams Phone: the add-on licence plus calling typically lands around £7 to £15 per user monthly all-in depending on call plan route, on top of existing M365 licences. Carrier-connect routes can undercut Microsoft’s own call plans at volume.
- Dedicated VoIP: typically £5 to £20 per user monthly including a call bundle, per the phone system cost guide, plus optional handsets either way.
The totals converge enough that cost rarely decides alone; the decision is operational fit, with cost as tiebreaker. One structural note either way: both are internet telephony, so the connectivity and QoS groundwork is identical and non-optional.
The decision, compressed
Ask two questions. Where do staff spend their day? If the answer is “in Teams”, the coherence argument is strong. How heavy and how structured is your inbound call handling? If phones are your front door with queues and teams behind them, dedicated platforms earn their keep. Hybrid answers exist too (Teams Phone for office staff, dedicated handling for the busy front desk, connected together), and are less exotic than they sound; we run both platforms across clients and design the split where it fits.
Migration paths mirror each other: numbers port to either destination, and moving between them later is a smaller project than the original PBX escape, so this is not a decision you are married to forever, just one worth getting right first.
Frequently asked questions
Is Teams Phone a proper replacement for a phone system?
Yes: full external calling on your business numbers, auto-attendants, queues, voicemail and mobile apps, delivered through Teams. The question is not capability but fit, with heavy structured call operations the case where dedicated platforms still lead.
What does Teams Phone cost per user?
The Teams Phone add-on plus a calling route typically totals £7 to £15 per user monthly on top of Microsoft 365 licences, varying with call plan choice and volume. Comparable dedicated VoIP runs £5 to £20 including bundles.
Can we keep our numbers with either option?
Yes, both: porting is standard and regulated to either destination, with the same no-gap scheduling either way.
Can we mix Teams Phone and a VoIP system?
Yes: a common pattern gives office staff Teams calling while a reception or phone team runs on dedicated handling, with calls flowing between them. Design effort is modest and the fit gains are real for split-shaped businesses.
Do we need special phones for Teams Phone?
No: headsets and the Teams apps cover most staff, with Teams-certified desk phones available where physical handsets matter. Dedicated platforms retain the wider handset ecosystems.
Which is better for a small business with simple needs?
Genuinely either; simplicity is well served by both. Default to Teams Phone if you are Microsoft-centric and meetings-heavy; default to dedicated VoIP if the phone is your front door or you want the phones decoupled from the IT stack. The audit settles edge cases quickly.
Get the fit assessed, not pitched
Vendors of each will tell you theirs fits; the honest answer comes from your call patterns, which take about twenty minutes to map. That mapping is part of the free IT health check, along with the connectivity check both options depend on, and a priced recommendation for whichever the evidence supports. Get in touch before the switch-off letter chooses your timeline.
