For UK businesses, can Microsoft Teams replace your phone system? This question goes beyond tech specs it’s a make-or-break choice now. The PSTN switch off rolls on. Every company faces the shift to VoIP just to keep calls flowing.
Truth is, Teams handles phone duties for plenty of UK outfits provided you configure it right and match it to how your operation runs. With the right setup, Microsoft Teams can serve as a full phone system for most businesses facing the PSTN deadline.
Why Traditional Phone Systems Are Ending
Traditional phone setups in the UK are heading for the scrap heap. BT Openreach is pulling the plug on PSTN and ISDN services by January 2027, so analogue landlines and loads of old PBX systems won’t work much longer.
Businesses can't dodge the fallout:
- Legacy phone lines will stop dead
- On premise PBX boxes become dead weight
- All voice calls must switch to VoIP over broadband or fibre
This forces cloud platforms like Microsoft Teams into the spotlight as a solid swap, not just a buzzword.
What Is the Microsoft Teams Phone System?
Microsoft Teams phone system runs as a cloud-based calling setup right inside the Teams app. It lets people make and take external business calls on the same platform they already handle meetings, chats, and teamwork with.
You can pick up calls on laptops, mobiles, tablets, or compatible desk phones—no physical lines needed. All the management happens through Microsoft 365, so you skip building out separate phone hardware.
To function as a full phone system, Teams links to the public network via one of Microsoft’s approved calling options.
How the Microsoft Teams Phone System Handles Business Calls
Microsoft Teams supports business calling through three main options, each suited to different use cases.
Microsoft Calling Plans
Microsoft provides phone numbers and call minutes directly. This option is easy to deploy but can be costly and less flexible for UK businesses with higher call volumes.
Operator Connect
Operator Connect links Teams with approved UK telecom providers. It offers better local support, call quality, and pricing flexibility, making it a popular choice for growing organisations.
Direct Routing
Direct Routing connects Teams to a SIP trunk or existing telephony provider. It offers maximum control and is ideal for complex call flows, compliance needs, or multi-site environments.
Microsoft Teams Phone System vs Legacy PBX (UK Context)
Legacy PBX systems came built for fixed offices and physical phone lines. Scaling them means hardware upgrades and those long-term contracts that lock you in.
The Microsoft Teams phone system flips that—cloud-based and works from anywhere. No desk-tied numbers, automatic updates, and users stay connected no matter where.
In the UK with PSTN services winding down by January 2027, old PBXs just aren’t future-proof anymore. Teams steps in as a smarter, more sustainable fit for how work actually happens today.
Phone System Features Microsoft Teams Can Fully Replace
Can Microsoft Teams replace your phone system with full PBX features? Yes—it covers:
- Auto attendants and call menus
- Call queues and ring groups
- Voicemail with transcription
- Call forwarding and transfers
- Desktop and mobile softphone access
- Call recording with appropriate licensing
For small and mid-sized UK businesses, these teams features are usually more than sufficient.
Turn Microsoft Teams into a full business phone system.
When Microsoft Teams Can Replace Your Phone System Completely
Teams is a strong replacement when:
- Your business already uses Microsoft 365
- Your workforce is hybrid or remote
- Call routing is simple to moderate
- You want to remove on-premise hardware
In these scenarios, Teams often reduces costs and simplifies IT management.
Limitations of Using Microsoft Teams as a Phone System
Despite its strengths, Teams has limitations that must be considered.
Advanced contact centre features, deep call analytics, or highly customised IVR logic often require third-party solutions. Licensing can also become expensive if poorly planned, and call quality depends heavily on network performance.
These are manageable issues, but ignoring them leads to poor implementations.
Cost Reality: Is Microsoft Teams Phone Cheaper Than Legacy Systems?
Old phone systems rack up endless costs—hardware buys, maintenance deals, and support bills that climb higher as PSTN fades out. Businesses get trapped paying these, particularly right now.
Microsoft Teams phone system switches things up with straightforward subscriptions. You cover licences and call minutes, but plenty of UK outfits save big by dumping PBX gear, cutting maintenance, and bundling it all into Microsoft 365. Nail the calling plan and ditch unneeded extras, and the savings kick in fast.
How to Replace Your Phone System with Microsoft Teams
Assess Your Current Phone Setup
Document call flows, users, numbers, and dependencies before migration.
Choose the Right Teams Calling Model
Select Calling Plans, Operator Connect, or Direct Routing based on business needs. A detailed setup guide helps clarify which model fits different UK business scenarios.
Number Porting and Call Flow Configuration
Port numbers carefully and test call routing thoroughly before go-live.
Training, Testing, and Go-Live
User adoption depends on training. Most failures are people-related, not technical.
How to Extend Teams Calling in Microsoft Teams Phone System
Teams reaches full value when extended beyond standard features, connecting employees, customers, and partners across devices and locations.
Mobile and SMS Integration
Work beyond desks with eSIM solutions that extend Teams Calling to mobiles, using business numbers anywhere. Supports hybrid/BYOD setups with Microsoft 365 compliance. SMS allows sending and receiving messages from the main number for updates and alerts.
Legacy and Contact Center Integration
SIP phones, paging, and analog devices integrate via SIP trunks or gateways, enabling gradual modernisation without full hardware replacement. Contact centres connect to Teams (built-in queues or third-party platforms) for unified voice, simplified management, and consistent experiences.
Compliance and AI
Regulated industries add call recording and archiving for compliant capture without disrupting workflows. AI-driven transcription, summaries, and intelligent routing via Microsoft Copilot streamline operations, reduce manual work, and improve call visibility.
Common Challenges in Teams Calling Migrations
PSTN switch-off adds complexity in UK and hybrid environments. Number management and porting, coordinating 01/02/03 numbers across carriers (21-day windows), emergency 999 routing with Ofcom compliance, hybrid coexistence with PBXs, device readiness (Teams-certified phones/headsets/gateways), and governance policies must all be addressed. Each challenge can be solved with a structured plan and the right UK voice partner.
Related FAQs:
Does Microsoft Teams work without PSTN lines in the UK?
Yes. Teams runs on VoIP and does not rely on traditional PSTN or analogue lines. It is built for the UK’s digital shift and works without hassle.
Can Microsoft Teams be used as the only phone system in an office?
Yes, with the correct calling setup. Many UK businesses have ditched desk phones entirely, and Teams handles all voice communications seamlessly.
Is Microsoft Teams suitable for small businesses?
Absolutely. It is cost-effective, easy to manage, and integrates directly with Microsoft 365, making it ideal for small businesses watching costs.
Do I need special internet speed for Teams calling?
Not really. Reliable broadband matters more than raw speed, and most offices can manage call quality effectively with a steady connection.
Can Microsoft Teams integrate with existing CRM systems?
Yes. Most CRMs integrate easily, and third-party tools are available for advanced call features when needed.
Is Microsoft Teams future-proof for UK business calling?
Yes. Cloud VoIP like Teams aligns perfectly with the PSTN switch-off, and Microsoft continues to develop the platform with new updates and features.
Final Verdict: Should UK Businesses Replace Their Phone System with Microsoft Teams?
With PSTN and ISDN services being phased out, UK businesses must move to a modern alternative. Microsoft Teams offers a cloud-based solution that supports calling, voicemail, routing, and mobile use in a single platform.
While larger contact centres may need additional tools, for most small and mid-sized businesses, Microsoft Teams can fully replace a traditional phone system. It integrates with Microsoft 365, removes hardware dependency, and prepares organisations for the future of business communications.
Calls, chat, and meetings in one.
