How Much Does Microsoft Teams Calling Cost for UK Businesses?
Most UK businesses should budget somewhere between roughly £12 and £30+ per user per month for a complete Teams Calling setup, once licensing, PSTN connectivity, and any hardware or setup costs are included. The headline price Microsoft advertises for the Teams Phone licence on its own — often around £6 to £7 per user per month — only covers part of what you actually need to make external calls.
Prices change fairly often, so treat the figures here as a realistic guide rather than a fixed quote, and confirm current pricing before budgeting a full rollout.
What Are the Three Cost Layers?
Getting external calling working in Teams means stacking three separate costs on top of each other:
- Your Microsoft 365 subscription — the base plan that includes Teams itself
- A Teams Phone licence — the add-on that unlocks calling features like the dial pad, call forwarding, and auto attendants
- PSTN connectivity — the connection to the actual phone network, via a Calling Plan, Operator Connect, or Direct Routing
Missing any one of these means a user can't make or receive external calls, even if the other two are in place. This is the single most common budgeting mistake — assuming the Teams Phone licence alone covers everything.
How Much Does the Teams Phone Licence Cost?
The Teams Phone Standard add-on typically costs somewhere around £6 to £7 per user per month, added on top of a Microsoft 365 or Office 365 plan that already includes Teams. Microsoft 365 Business plans that include Teams generally range from around £4.60 to £17 per user per month depending on the tier, with the higher-tier E5 plan sometimes including Teams Phone Standard at no extra cost.
How Much Do Calling Plans, Operator Connect and Direct Routing Cost?
This is where costs diverge the most, depending on which connectivity route you choose:
- Calling Plans — Microsoft's own domestic plans typically start from around £6 to £8 per user per month for a set allowance of UK minutes, usually a few thousand minutes a month. International plans cost more.
- Operator Connect — priced by an approved telecoms partner rather than Microsoft directly, often broadly comparable to Calling Plans but with more flexibility on contract terms and support.
- Direct Routing — costs vary by SIP trunk provider, but the connectivity itself is often the cheapest per-minute option once volume increases. It also carries setup costs for a session border controller, which can run into thousands of pounds if you're not using a cloud-hosted option.
What's a Realistic Total Cost Per User?
| Setup | Rough monthly cost per user |
|---|---|
| M365 Business Standard + Teams Phone + Calling Plan | £20–£25 |
| M365 Business Standard + Teams Phone + Operator Connect | £18–£25 |
| M365 Business Standard + Teams Phone + Direct Routing (excluding SBC setup) | £16–£22 |
These are indicative ranges, not quotes — actual costs depend on your existing Microsoft licensing, call volumes, and which provider you use for connectivity.
What Other Costs Should You Budget For?
Beyond the per-user monthly cost, a few one-off or occasional costs are easy to overlook:
- Number porting — moving existing UK numbers across usually takes one to two weeks and may carry a small provider fee
- Teams-certified handsets — optional, but if your team wants a physical desk phone rather than calling from a laptop or mobile, expect a per-device hardware cost
- Session border controller setup, if you choose Direct Routing — this can be a meaningful one-off cost unless you use a cloud-hosted SBC service
- Setup and configuration time — either your own IT resource or a specialist provider to get licensing, routing, and auto attendants configured correctly
Is Teams Calling Cheaper Than a Dedicated Phone System?
Not necessarily. Once you've added a Teams Phone licence, PSTN connectivity, and any hardware, the total often ends up broadly similar to a dedicated hosted system such as Gamma Horizon, which typically prices telephony as a single predictable cost per user. The genuine advantage of Teams Calling isn't necessarily price — it's having calling built into an app your team already uses daily. Whether that's worth the setup complexity depends on how your business actually uses the phone.
Frequently Asked Questions
Is the Teams Phone licence included in Microsoft 365? Not usually. Most Business plans require it as a separate add-on, though it's bundled into some Enterprise E5 plans at no extra cost.
Do I need to pay for calling minutes separately? It depends on your connectivity method. Calling Plans include a bundled minute allowance, after which extra usage is charged per minute. Direct Routing and Operator Connect pricing structures vary by provider.
Is Teams Calling worth it before the PSTN switch-off? It's one option among several for moving off traditional lines before the switch-off. Whether it's the most cost-effective one depends on your call volumes and how your team works — worth comparing properly rather than assuming it's the default choice. Our PSTN switch-off checker is a good starting point.
Can I reduce costs by only licensing some users for Teams Phone? Yes. Only users who genuinely need to make or receive external calls need a Teams Phone licence — internal calling between colleagues is included in standard Teams at no extra cost.
Getting an accurate, all-in cost for your business takes more than reading Microsoft's list price. Request a quote for an honest comparison against Gamma Horizon and other systems, or use our phone system finder to see how the options stack up.
