Microsoft Teams License - Which one you Need for Microsoft Teams Phone

How to / Guide

February 20, 2024

Updated: April 2024

Navigating the maze of Microsoft's licensing options for Microsoft Teams Phone can be daunting — yet crucial for fully leveraging its capabilities. To integrate telephony features smoothly and unlock the full capabilities of Teams as your unified communication platform, the right Microsoft Teams License is essential.

In this guide, we cover the fundamentals of choosing the right Microsoft Teams Phone License, preparing your team for a smooth journey to cloud telephony. 

This guide covers:

Office 365 and Microsoft 365 Suites – with and without Microsoft Teams

If you are an Office 365 or Microsoft 365 customer, it is highly likely that you already have a Microsoft Teams License. Until late 2023 for Europe and early 2024 for the rest of the world, Microsoft included Microsoft Teams in it’s productivity suites. Microsoft suites broadly break down into:

  • Microsoft 365 for Business – for small and medium businesses up to 300 users
  • Office 365 - the core products for Enterprise Customers (E licenses)
  • Microsoft 365 – the full suite for Enterprise Customers (ME licenses)

Also available are special suite options for Frontline (F licenses), US government (G licenses), and Education (A licenses).

Now, for Microsoft 365 Business plans, customers can choose to buy with or without Microsoft Teams bundled. The bundle without Teams is a slightly reduced cost.

New Enterprise customers (brand new to buying any E licences on their tenant) can only buy the suites without Microsoft Teams and must explicitly add Microsoft Teams Enterprise SKU, a license that adds back in Microsoft Teams.

Existing Enterprise customers can continue with the suite license with Microsoft Teams or choose to move to the new SKU without Teams. These new suites without Teams are denoted as “No Teams” suites. 

Microsoft Teams is also offered as a standalone product called “Microsoft Teams Essentials”. This license is cheaper and only includes Microsoft Teams, not other Microsoft 365 components like Exchange or SharePoint. It is targeted at very small businesses who might be using another email platform. You can add Teams Phone to this SKU, but it is a rare corner case.

Microsoft Teams Phone Add-on

Teams Phone is an add-on capability to core Microsoft Teams, officially called “Teams Phone Standard”. Teams Phone Standard licenses offer all the features of Teams Phone System on a per user basis. These features include cloud voicemail, caller ID, call park, call forwarding, auto attendants, call queues, call transfer, and caller ID.

This extra Teams Phone license is included in Office 365 E5 and Microsoft 365 E5. the highest-level suite licenses, if you have the original suites or have added the Teams Enterprise add-on to the new “no Teams” suites, Good news for Office 365 E5 or Microsoft 365 ME5 users: you already have the necessary license for Teams Phone. Deploying it will help you make the most of your investment.

If your users have any other license SKU/Suite, E3 for example, you will need to buy the Add-on Teams Phone Standard per user license For frontline workers (F1 or F3) there is a special reduced cost Teams Phone Standard Frontline Worker license.

There are no extra licensing fees for the user software on desktop or mobile, or for the utilization of Physical Teams Phones or Teams Displays by licensed users.


Phone Numbers and Calling Plans

Teams Phone Standard enables Teams to work as a phone. However, to activate this feature, users also need to have phone connectivity. Usually this would be with a phone number per user, however you can also enable users without a per-user phone number though a feature called Shared Calling. There are multiple ways to establish what is called PSTN (Public Switched Telephone Network) connectivity:

  • Microsoft Calling Plans - Microsoft offers first party phone number and calling plan bundles and Pay As You Go (PAYG) options.
  • Operator Connect is a Microsoft certified program for telephony providers like Pure IP. It allows them to offer phone numbers and calling plans through the cloud, integrated with Microsoft Teams.
  • Direct Routing is an option to connect a physical or virtual Session Border Controller to Microsoft Teams. This can either be customer managed equipment or service provider managed, sometimes called Direct Routing as a Service (DRaaS).

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Teams Phone Mobile is a feature available only through select certified mobile providers. It allows you to have a mobile number and contract that doubles as your Teams Phone number, combining everything into one seamless service.
None of these require an additional “capability license” but they will incur some kind of service cost, either per user or per DDI/per telephony channel (concurrent call) depending on the model of the provider.

You may also want Communication Credits. This is a Microsoft capability to pay per minute for PSTN calls. You don't need this if you don't use Microsoft Calling Plans and are satisfied with the included PSTN Audio Conferencing allowances and capabilities.

Communication credits are used for:

  • Microsoft Calling Plan overages or international calls on a domestic plan
  • Credit for Microsoft Pay as You Go Calling Plans
  • Credit for PSTN Audio Conferencing outbound calling beyond any minutes included
  • Credit for free Phone numbers for Microsoft Audio Attendants, Call Queues or PSTN Audio conferencing

The Microsoft Teams PSTN connectivity option(s) that is best for you will depend on your user requirements and your countries/locations. You can also mix and match the different connectivity methods to meet your organization's requirements. 

Pure IP offer both Operator Connect and Direct Routing, including dedicated managed Session Border Controllers for complex scenarios. Pure IP was one of the first Microsoft certified providers and has some of the highest country coverage. We are happy to advise you on your options.

How to License Microsoft Copilot AI for Teams Phone

Microsoft Copilot is an AI-powered assistance tool that provides intelligent support and insights through the integration of Office 365 applications. For Microsoft Teams Phone, Copilot AI can automate a variety of tasks related to your voice services including:

  • Get real-time summarization of calls and insights
  • Intelligent call routing
  • Ask Copilot to draft notes and capture key moments in phone conversations including main points, names, numbers, action items
  • Provide transcription services and real-time translation

Microsoft Copilot for Microsoft 365 is the license you need to add Copilot to Microsoft Teams for chat, calling and meetings. 

Copilot utilizes data patterns and interactions in Teams, Outlook, and other Office 365 tools. It offers real-time assistance, suggestions, and task automation. 

If you are using Microsoft Copilot or want to use Copilot, then adding Microsoft Teams Phone is essential  to ensure all your communications information is accessible to Copilot. Phone call insights are important for Copilot's success, providing a complete understanding of key interactions.

What Copilot can do for Microsoft Teams Phone:

Microsoft has expanded access to Copilot for Microsoft 365, enabling businesses of all sizes to benefit from its features. Copilot costs $30 per person per month, and there is no minimum number of users needed. 

A product license for Microsoft 365 Business Standard, Business Premium, E3, E5 or Office 365 E3 or E5 is required to purchase Copilot for Microsoft 365.

How to License Microsoft Teams Phone for Frontline Workers

For organizations employing frontline workers who require streamlined communication tools, the new Teams Phone for Frontline Workers SKU offers a practical and cost-effective solution. 

This specialized license for Teams Phone is tailored to match the specific needs and usage patterns of frontline roles, considering they will likely be device/phone centric users. As such it is a reduced cost compared to Teams Phone Standard.

If your workforce includes a mix of knowledge workers and frontline staff, this license can seamlessly integrate with your existing Teams Phone deployments. 

It aligns with the job requirements of frontline workers, ensuring they have reliable, on-the-go communication, while aligning cost and accessibility with customer needs. This not only optimizes your telephony expenses but also brings uniformity across different workforce segments within the Microsoft Teams ecosystem.

How to License Teams Phones in Common Areas

For phones used in shared spaces, like rooms or outside doors, a special license called "Microsoft Teams Shared Devices" is required. This can be used to sign-in a physical Teams Phone, Teams Display in Hot Desking mode or a DECT Phone.

This is a license for that device, not the user. It allows multiple users to sign in and use a shared device, such as a phone or a display, without requiring individual licenses for each user. It includes device management capabilities, such as configuration, updates, monitoring, and troubleshooting, through the Teams admin center or third-party tools.

shared devices

How to License Microsoft Teams Meeting Room Systems

Microsoft certifies room solutions from many partners, these are called Microsoft Teams Rooms. For basic requirements, 1-4 rooms and basic functionality, you can use the free Microsoft Teams Rooms Basic license. For full features and management, you will need the Microsoft Teams Rooms Pro license.

meeting rooms license

How to get Phone Numbers for Meetings, PSTN Audio Conferencing

PSTN audio conferencing is technically a separate license but is a free add-on to nearly all Office 365 / Microsoft 365 suites. You do not need Teams Phone to add PSTN Phone numbers for people to dial into your Microsoft Teams meetings.

how to get phone numbers

Contact us if you have questions about Microsoft Teams Phone licenses or if you need help with deployment. Additionally, we can assist you in optimizing your Teams Phone investment with Pure IP.

Tania Morrill

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