Closing out 2025, Microsoft announced that Teams Phone hit 26 million PSTN users worldwide, up from 20 million in April 2024. That's a 30% jump in less than two years; solidifying Teams Phone as one of the largest cloud telephony platforms on the market.
The real story is what Microsoft has been doing to earn it. Over the past year, they've systematically addressed gaps that kept enterprises hesitant, rolling out features that matter to how people get work done, and making it easier for IT teams to manage everything from one place.
The features that made the difference in 2026
The pace of Teams Phone development has been impressive. Microsoft's been adding capabilities constantly, but a few developments deserve closer attention.
AI that handles the busy work
The biggest shift has been around AI. After a Teams Phone call, you can pull up Copilot and ask it to summarize what happened, surface key points, and suggest follow-up actions. The system pulls from Microsoft Graph data and web context - not just the transcript - so you get something more useful than a word-for-word recap.
During live calls, you can invoke Copilot without recording or transcribing. Click the Copilot icon and let it handle documentation while you focus on the conversation. Microsoft even brought this to desk phones, with suggested prompts right on the device for creating summaries and notes.
Intelligent transfer suggestions use AI to recommend who should take a call based on context, communication history, and group membership. When you transfer, Copilot can generate a brief summary to send along so the next person isn't starting from scratch.
For more on Copilot, view our Ultimate Guide >>
Teams Phone extensibility means new integration options
One of the most significant developments for 2025 was Teams Phone extensibility powered by Azure Communication Services. This lets developers and partners integrate Teams calling features directly into custom applications using ACS APIs.
The extensibility framework eliminates the need for separate telephony stacks. Organizations can build CRM dialers or helpline solutions that place and receive calls via Teams Phone infrastructure - using the same PSTN connectivity, call routing, and emergency calling - without forcing users into the Teams interface.
For contact centers, this is significant. Certified CCaaS providers can embed Teams calling directly in their agent desktop using the ACS-based integration. The agent gets their familiar contact center interface, but the telephony infrastructure runs through Teams Phone. IT teams manage one telephony platform across internal communications and customer-facing operations.
Third-party providers have already built solutions for Salesforce and ServiceNow integration. Agents make and receive Teams calls directly within these platforms, with automatic call logging and screen-pop functionality. Power Automate can trigger flows on missed calls. Power BI can pull call records for analytics.
Microsoft positioned this as meeting customers where they work, rather than forcing everyone into a single interface. For organizations with established workflows, it means modernizing telephony infrastructure without abandoning the tools their teams already use.
Better call handling for real scenarios
Shared line delegation now works on mobile - delegates can see and resume calls on hold from any shared line using the Teams mobile app. If a reception call is on hold, a manager on their mobile can pick it up.
Call queues got priority levels, so VIP customers or urgent incidents get routed to agents first. The new Queues app allows supervisors to listen in, whisper guidance, or barge in on calls for coaching purposes.
The transfer interface shows live status updates - when the call is ringing, in progress, or completed. Small details that matter when handling dozens of calls daily.
Compliance and admin tools
For regulated industries, Microsoft added policy-based recording at the call queue level. Every call that goes through gets captured automatically by a certified third-party solution - no managing individual user policies.
On the admin side, Copilot in the Teams Admin Center lets IT teams ask questions in natural language and get step-by-step guidance. It proactively recommends policy optimizations for call quality based on best practices.
A new Silent Test Call feature lets admins run synthetic test calls to verify audio quality and network readiness before issues affect real calls.
Why organizations are making the switch
The growth to 26 million users comes down to three things.
- Over 93% of Fortune 100 companies use Microsoft 365. Teams Phone doesn't feel like another system - voicemails show up in Teams, call records feed into compliance tools, you launch calls from Outlook. It's all one platform.
- Organizations report 50-78% drops in telecom spending. North Highland cut their telecom costs by 70% by switching to Operator Connect. For E5 customers, Phone System is included. For E3, it's a $10 add-on.
- You can use Microsoft's calling plans, bring your own carrier, or integrate your mobile carrier with Teams Phone Mobile. Over 100 countries covered through 100+ certified carriers.
What to expect in 2026
Microsoft's roadmap for Teams Phone isn't slowing down. Here's what's coming that should keep the growth trajectory going.
1. More AI, deeper integration
Live translation during one-on-one VoIP and PSTN calls arrives early 2026.
AI-based voice isolation, spam call detection, and sentiment analysis are all coming.
Voice recognition enrollment will happen automatically during meetings, enhancing security without friction.
2. Contact Center convergence
Microsoft made Teams Phone extensibility for Dynamics 365 Customer Service generally available in September 2025. Organizations can route customer calls via Teams Phone and manage everything in Dynamics, with compliance recording and advanced call controls built in.
For existing contact center investments, dozens of CCaaS providers - 8x8, Genesys, NICE, Five9 - offer certified integrations using Azure Communication Services. The gap between UCaaS and CCaaS is closing.
In 2026, expect more organizations running their entire communications stack on Teams Phone.
3. Continued global expansion
Microsoft keeps expanding calling plan availability and Operator Connect options, adding regions and telecom providers throughout 2025. Teams Phone Mobile partnerships will grow beyond the current US and UK carriers as more cellular providers offer fixed-mobile convergence.
The competition isn't standing still
Teams Phone's 26 million users is impressive, but Zoom Phone hit 10 million seats in 2025, and Cisco Webex Calling has 13-15 million users.
What sets Teams Phone apart is the Microsoft 365 ecosystem. If you work in Outlook, SharePoint, and Office apps daily, Teams Phone makes sense in a way standalone solutions don't. But competitors offer compelling alternatives for organizations with different needs.
The 2026 competition will center on AI capabilities and workflow integration. Microsoft's advantage is Copilot and Office integration. Zoom has major AI Companion upgrades coming. RingCentral is building AI through partnerships. Everyone's racing to make calling smarter and more integrated.
Where Teams Phone goes from here
Getting to 26 million Teams Phone users isn't just about the number. Microsoft has been filling feature gaps, improving reliability, making administration easier, and integrating with systems people actually use.
For partners and customers evaluating options, Teams Phone has matured into a legitimate enterprise phone system. The AI features are useful. The mobile integration solves real problems. The compliance tools work. And if you're invested in Microsoft 365, the economics make sense.
In 2026, expect continued growth as organizations reach the end of legacy PBX contracts. The convergence of UCaaS and CCaaS, the expansion of AI capabilities, and continued investment in global connectivity point to Teams Phone becoming even more central to how businesses communicate.
Whether it's the right choice depends on your specific needs and technology stack. But with 26 million users and climbing, Microsoft has figured out how to make cloud telephony work at scale.
Considering Teams Phone for your organization? Pure IP can help you evaluate whether it's the right fit, navigate the licensing options, and plan a deployment that works with your existing infrastructure. Contact us to discuss your specific requirements and get answers to your Teams Phone questions.
