What Microsoft licensing is required to get calling in Teams?

Gone are the days of Teams being bundled in with standard Microsoft license packages, so its more important than ever to know exactly what you need as a business to get calling in Teams. It's true, there is now yet another layer of licensing needed to use Teams to call external numbers via a PSTN breakout, but the level of additional licenses that you'll need still depends on your requirements and is often at the centre of the first questions asked when businesses start to look at Teams voice. In this article we will be giving an in-depth look at what Microsoft licensing there is out there, what it covers and what you may need to get using Teams Phone to make calls.

Microsoft 365 licensing explained

So first things first, depending on the size of your business you will need either a Microsoft 365 Business license or a Microsoft 365 Enterprise license. Each of these licenses have per user, per month pricing structures and each of them are split into tiered bundles which have different capabilities. But what exactly are the differences between Microsoft 365 licenses?

Microsoft 365 Business licensing

Microsoft 365 Business licenses are for companies with fewer than 300 employees. There are three price tiers for Microsoft 365: Business Basic, Business Standard, and Business Premium. With each tier providing different feature and service levels.

Microsoft 365 Enterprise licensing

Microsoft 365 Enterprise licenses are for larger companies with more than 300 employees. They deliver more features and services than 365 Business licenses and come in at a higher price point. Microsoft 365 Enterprise licenses are separated into two main categories:

• Microsoft 365 E3
• Microsoft 365 E5

For businesses looking to empower their frontline workers there are also Microsoft 365 F3 licenses.

What is Microsoft Teams licensing?

In April 2024, Microsoft made the choice to stop bundling Teams with standard Microsoft licensing suites, because of this if you want to have access to Microsoft Teams you will have to buy a separate Microsoft Teams license (again there is one set of licenses for Business and one for Enterprise). Like the Microsoft 365 licenses, these are also split into tiers and have different per month/per user pricing structures to suit different needs. A Microsoft Teams license is the first thing that you will need to get calling in Teams. 

With a Microsoft Teams license, companies can make calls internally, collaborate with video calls, send messages, and share files. This means that the great unbundling of Microsoft Teams presented a new opportunity for businesses who wanted to unlock Teams for collaboration (and communication, but we'll talk about this later) without paying for the more costly Microsoft 365 bundle.

Crucially though, as we've just mentioned, with just a Teams license what businesses can't do is make and receive calls externally outside of Teams. To use Microsoft Teams as a business phone system additional licensing is needed.

Making calls with Microsoft Teams licensing

A key proponent of making calls externally outside of Teams is the Microsoft Teams Phone license. With it, you can unlock the cloud-based phone system that lies within the Teams interface which lets users receive and transfer calls. If you're an enterprise, the Microsoft 365 E5 subscription already comes with a Teams Phone license, but if you're on an E3 license you will need to buy your Teams Phone license separately. And that's all the licensing you will need to be able to make PSTN calls using Microsoft Teams, but you will still have to decide which calling method you want to use.

What you need to get calling after Microsoft licensing

There are three main ways in which you can make PSTN calls using Microsoft Teams - Microsoft calling plans, Operator Connect and Direct Routing.

Microsoft calling plans

The least popular option out of the three available methods is to use a Microsoft Calling plan where Microsoft essentially acts as a Carrier by providing numbers and minutes. For this Microsoft offer domestic, international and pay as you go options.

Microsoft Operator Connect

Operator Connect is currently the second most popular option for enabling voice in Teams, but it is expected to become the most widely used Teams Voice solution in the next few years. With Operator Connect, businesses can access the Teams Operator Connect marketplace in the Teams admin centre and simply select their chosen Carrier. With over 100 carriers now on the Operator Connect platform, businesses have the ability to choose carriers that they trust to bring voice into Teams.

Direct Routing

And finally onto the current leading method in Teams voice enablement - Direct Routing. Direct Routing allows companies to add existing business phone technology to their Teams environment with their existing phone provider, avoiding both costly 'rip and replace' actions and the need to switch carriers.

There is no need to purchase a Microsoft calling plan when utilizing the Direct Routing feature as your minutes and numbers are provided by the Service Provider. You will however still need to get that Microsoft Teams Phone license that we talked about earlier (if you're not on an E5 license).

As a leading example, Call2Teams is world renowned for helping providers integrate Direct Routing routing solutions, and as an agnostic middleware it has helped over a million users get calling in Teams across the globe. 

With some Direct Routing solutions you may only even need to purchase one Teams Phone license per organization.

What Microsoft licensing is required to get calling in Teams - the short version

And so, getting to a point where as a business you are able to make calls in Teams requires a number of components:

1. If you're looking to get the entire Microsoft Suite you need to start off with a Microsoft 365 license (Either Enterprise or Business)
   
   
2. You then have to get a Microsoft Teams license. If you're just looking for internal collaboration on top of your calling, you can just get the Microsoft Teams license
   
   
3. Unless you have the Microsoft 365 E5 suite, you will then need to get a Teams Phone license
   
   
4. Finally you have to choose your method of calling, whether that is a Microsoft calling plan, through Operator Connect or with a Direct Routing solution. 

For a guided walkthrough of the Microsoft licensing journey, visit our interactive Microsoft licensing infographic below.