Microsoft Teams Phone and Direct Routing for UK Business: A 2026 Guide

Microsoft Teams is now the primary work app for a huge share of UK businesses — chat, video, files, meetings, all in one place. It makes obvious sense to add the business phone system into the same app. That is what Microsoft Teams Phone does: it turns Teams into a fully-featured cloud phone system with proper business phone numbers, deskphone support, IVRs, hunt groups, call recording and everything else you'd expect from a hosted VoIP platform.

This guide covers what Microsoft Teams Phone actually is, the two ways to make and receive external calls (Microsoft Calling Plans vs direct routing), the licensing model, the honest limitations, and what a Teams Phone deployment looks like for a real UK business.

The three ways to make external calls in Microsoft Teams

What Microsoft Teams Phone with direct routing gives you

• Native calling in the Teams desktop app, mobile app and web app.
• A UK business phone number for every user, ported from any UK carrier (BT, Gamma, TalkTalk Business, Vonage, RingCentral, 8x8, Daisy, PCS, or otherwise).
• Multi-level auto-attendants (Teams calling attendants).
• Call queues with skills-based, round-robin and priority routing.
• Voicemail with transcription delivered to email.
• Call recording (Microsoft-native or third-party, depending on requirements).
• Deskphone support (Yealink, Poly, AudioCodes MP1288, Cisco IP Phone).
• Emergency 999 with automatic address registration.
• Business SMS via approved third-party integrations.
• CRM integration via Teams (Dynamics, Salesforce, HubSpot).

Microsoft Teams Phone licensing in 2026

Two components: a Microsoft 365 licence with Teams (Business Basic/Standard/Premium, or Enterprise E3/E5) plus a Teams Phone Standard licence (or the equivalent bundled in E5). The Teams Phone licence unlocks calling features but does not include external minutes — those come from your direct-routing provider.

A UK direct-routing service typically costs £3–£8 per user per month with unlimited UK landline and mobile minutes. Total Teams Phone spend per user in 2026: £6–£15 per user per month for the calling side (excluding the underlying Microsoft 365 licence).

What Microsoft Teams Phone does not do brilliantly (yet)

• Deep contact-centre features (wallboards, agent scripting, quality scoring, adherence reporting) — third-party overlays like Landis, Anywhere365 or Luware sit alongside.
• PCI DSS pause/resume for card payments — needs a third-party integration.
• Highly complex dial plans and legacy PBX customisations — some workflows simply don't map to Teams calling.
• Very high call volumes (>50k concurrent) — needs SBC engineering.

When Microsoft Teams Phone is the right answer

UK businesses already living in Teams. Knowledge-work businesses where the phone is one channel among many. Businesses that want to reduce app sprawl. Businesses that prize simplicity over deep contact-centre customisation. In short: probably the majority of UK SMEs.

When a dedicated cloud phone system is the better answer

Contact centres, businesses with heavy PBX customisation, retail chains with in-store deskphones separate from staff Teams accounts, hospitality with front-of-house shared phones, businesses that need PCI-compliant pause/resume, and any business where the phone is the primary channel. A dedicated cloud phone system (like Atom Voice) can still integrate with Teams — just doesn't force Teams to be the only phone client.

How Atom IP delivers Teams Phone for UK businesses

We provide UK direct-routing services with certified session border controllers, port numbers from any UK carrier, design the Teams calling policies and routing plans, deploy compatible deskphones, integrate CRM and (where wanted) contact-centre overlays, and provide named-engineer support. Everything on one bill, one contract, one accountable team.