Turning Microsoft Teams Into Your Actual Business Phone System

Most businesses already live inside Microsoft Teams. It’s where the chat happens, where meetings get booked, where files get shared — for many offices, Teams is simply where work happens. And yet a huge number of those same businesses still run a completely separate phone system alongside it: a desk phone on every desk, a PBX in a cupboard somewhere, a phone bill that has nothing to do with the Microsoft 365 subscription sitting right next to it.

That’s not because Teams can’t handle calling. It’s because most businesses have never been shown, clearly, what it actually takes to make Teams the phone system rather than just the chat app.

There are two ways to connect Teams to the outside phone network, and the difference between them matters more than most vendors let on. The first is Direct Routing, which connects Teams to a third-party carrier via a Session Border Controller — more flexible, works with almost any existing number range, but needs a partner who genuinely understands the SBC layer to get right. The second is Operator Connect, a newer, more plug-and-play model where the carrier is pre-integrated with Microsoft’s own backend — simpler to deploy, but with less flexibility on number porting and international routing.

Neither option is universally “better.” The right one depends on the business: how many numbers need to move, whether there’s an existing carrier relationship worth preserving, how much international calling is involved, and how quickly the business needs to be live. The problem is that a lot of businesses never get asked these questions — they get sold whichever model the vendor happens to specialise in, whether or not it’s actually the right fit for them.

Once the connectivity model is sorted, the practical benefits are significant. Every call becomes visible inside the same app where the rest of work already happens — no separate voicemail system to check, no separate softphone login, no forwarding rules to configure on a desk handset before annual leave. A staff member can take a business call on their laptop from home exactly as easily as from their desk, because the phone number was never tied to a physical handset in the first place. IT admin gets simpler too: adding or removing a user’s calling licence is a few clicks in the same admin centre already used for email and Teams itself, not a separate ticket to a separate PBX vendor.

There’s also a cost dimension worth being honest about. Removing a standalone PBX doesn’t automatically make calling free — call plans and licensing still cost money — but it does remove an entire category of hardware maintenance, a second vendor relationship, and the awkward situation where the phone system and the collaboration platform are two unrelated projects with two unrelated support processes.

Getting this right requires someone who can look at both sides of the problem: the Microsoft 365 environment on one hand, and the telecommunications carrier relationship on the other. That’s a narrower skill set than it sounds — plenty of IT providers know Microsoft 365 well without understanding carrier-side number porting, and plenty of telecom providers understand carriers without knowing their way around the Teams admin centre. Digital Island sits deliberately in that middle ground: NZ-based specialists who configure both the Teams calling setup and the underlying connectivity, rather than handing off half the job to someone else.

Getting the wrong model, or the right model badly configured, tends to surface in ways that are individually minor but collectively corrosive: a handful of inbound calls that mysteriously don’t ring through in the first week, a caller ID that shows the wrong number on outbound calls, a voicemail-to-email setup that quietly stops working after a password reset nobody flagged. None of these are catastrophic on their own, which is precisely why they’re easy for a vendor to wave away as teething problems rather than genuine configuration errors. Multiply a handful of small issues across every user in the business during the first fortnight of a new system, though, and the cumulative impression — fairly or not — becomes “our phones don’t work properly any more,” which is a difficult reputation for a new system to shake even once every individual issue has been resolved.

For a business already paying for Microsoft 365, the question worth asking isn’t whether Teams calling is possible — it clearly is, for the vast majority of businesses. It’s whether the separate PBX bill sitting next to it is actually buying anything the Teams licence isn’t already capable of, once it’s connected properly.