Microsoft Teams Phone Licensing in Australia: Which Licence Do You Need?

Last updated: August 2026

If you want to use Microsoft Teams as a business phone system most Australian businesses will have to add Teams Phone Standard to their Microsoft 365 plan. The cost of Teams Phone Standard is currently AU$15.00 per user per month excluding GST, when you pay for it every year. If you already have Microsoft 365 E5 then you do not have to worry about getting Teams Phone Standard because it is already included.

Microsoft Teams Phone gives you the functionality of a phone system inside Microsoft Teams. Just having the licence for Microsoft Teams Phone is not enough. You will also need a calling service and a PSTN connection so you can make external business calls. Microsoft supports several PSTN connectivity options, including third-party providers, Operator Connect, Direct Routing and Microsoft Calling Plans where available.

For most Australian businesses, the important question is therefore not simply “Do I need Teams Phone?” but “Which Microsoft licence do I already have, what does it include, and what do I actually need to add?”

Where Does the Teams Phone Licence Fit?

A Teams-based phone system can be thought of as three layers.

Layer 1: Your Microsoft 365 plan

This is the Microsoft subscription your business already uses, such as Microsoft 365 Business Basic, Business Standard, Business Premium, E3 or E5.

Layer 2: Teams Phone

This is the Microsoft licence that provides the Teams Phone functionality needed for business telephony.

Layer 3: PSTN connectivity and phone service

Phone numbers, call rates, porting, and the call handling your staff actually use. This comes from an Australian provider such as Broadconnect, and it is not a Microsoft licence.

Which Microsoft Teams Phone Licence Do You Need?

The licence you need depends on the Microsoft 365 plan your business already has.

Current Microsoft plan	What you generally need for Teams calling
Microsoft 365 Business Basic	Teams Phone Standard
Microsoft 365 Business Standard	Teams Phone Standard
Microsoft 365 Business Premium	Teams Phone Standard
Office 365 E1 or E3	Teams Phone Standard
Microsoft 365 E3	Teams Phone Standard
Microsoft 365 F1 or F3 (frontline)	Teams Phone Standard, or the cheaper Teams Phone Standard for Frontline Workers
Teams Enterprise, Teams Essentials or Teams EEA (standalone Teams)	Teams Phone Standard
Microsoft 365 E5 or Office 365 E5 that includes Teams	Nothing. Already included.
Office 365 E3 or Microsoft 365 E3 (no Teams)	Teams Enterprise first, then Teams Phone Standard on top
Microsoft 365 E5 (no Teams) or Office 365 E5 (no Teams)	Teams Enterprise only. Phone system already included.

The key point is that Microsoft 365 E5 is not required for Teams calling. E5 is simply different because the Teams Phone entitlement is already included.

Does Microsoft 365 Business Premium Include Teams Phone?

No. Microsoft 365 Business Premium includes additional security, identity, device management and compliance capabilities, but it does not include Teams Phone.

If your business uses Business Premium and wants to make and receive external business calls through Teams, Teams Phone Standard needs to be added separately. This is one of the most common licensing assumptions to get wrong because the word “Premium” can make it sound like telephony should already be included.

What If Your Microsoft 365 Plan Does Not Include Teams?

This is where Microsoft licensing becomes more complicated. Microsoft sells some enterprise plans in versions with Teams and without Teams. If your Microsoft 365 or Office 365 plan does not include Teams, you need Teams itself before you can use Teams Phone.

For an E3 plan sold without Teams, the general structure is:

Microsoft 365 E3 without Teams → Teams Enterprise → Teams Phone Standard

For an E5 plan sold without Teams, the structure is different:

Microsoft 365 E5 without Teams → Teams Enterprise

The Teams Phone entitlement is already included with E5, so adding Teams Phone Standard separately would duplicate the phone-system entitlement. This distinction is particularly important when reviewing a Microsoft licensing bill or a Teams calling quote. “E3” and “E3 without Teams” are not interchangeable when working out what you need to buy.

What Does Microsoft 365 E5 Include for Calling?

Microsoft 365 E5 already includes the Teams Phone/phone-system entitlement. That means an E5 customer should not normally be paying for Teams Phone Standard on top of the E5 licence.

The same principle applies to E5 variants sold without Teams. The Teams licence may need to be purchased separately, but the phone-system entitlement remains included.

So if a business is already paying for E5 and receives a quote that adds Teams Phone Standard as a separate Microsoft licence, it is worth checking exactly what has been included.

How Much Does Teams Phone Cost in Australia?

Microsoft’s current Australian list price for Teams Phone Standard is AU$15.00 per user per month, excluding GST, when paid yearly. Microsoft Teams Phone – Australian pricing

Licence	Indicative Cost	Notes
Teams Phone Standard	From AU$15.00/user/month	Annual commitment, ex GST
Teams Enterprise	Varies	Relevant when the underlying plan does not include Teams
Microsoft 365 E5	Higher Microsoft 365 subscription	Teams Phone entitlement included

Microsoft also offers monthly and annual subscription terms, with monthly billing generally costing more than an equivalent annual commitment.

What About Microsoft Teams Phone with Calling Plans?

Microsoft also lists Teams Phone with Calling Plan bundles on its Australian website. However, the presence of an Australian-dollar price does not by itself mean that the associated Calling Plan is available for Australian domestic calling.

Microsoft states that Calling Plans are available only in specific countries and regions and directs customers to check the current country and region availability before purchasing.

Microsoft’s Australian page currently displays bundled products including:

Microsoft Teams Phone option	Australian list price shown
Teams Phone Standard	AU$15.00/user/month
Teams Phone with pay-as-you-go calling	AU$19.50/user/month
Teams Phone with domestic calling	AU$32.90/user/month
Teams Phone with domestic and international calling	AU$50.90/user/month

For an Australian business, the safer approach is to check Microsoft’s current market availability and then determine whether a Microsoft Calling Plan or an Australian PSTN provider is appropriate. Where Microsoft Calling Plans are not available for the required Australian service, Teams Phone Standard plus an Australian calling provider is the relevant structure.

Telstra Calling for Office 365 Is Being Withdrawn

Australian businesses currently using Telstra Calling for Office 365 (TCO365) also need to consider the service’s withdrawal.

If you’re affected, see our guide to migrating from Telstra Calling for Office 365 for information on the available options and what to consider when planning your transition.

Telstra states that TCO365 has not been available to new customers since 1 November 2024. Existing customers cannot add new services, make changes or recontract from 30 August 2026, and the service is scheduled to be withdrawn from the market from 30 November 2026.

If your business is currently using TCO365, this makes it important to understand your replacement options before those deadlines.

Microsoft Licences That Are Often Confused With Teams Phone

Teams Phone is often confused with other Microsoft products because several licences appear alongside it in Microsoft 365 administration and some have similar names or pricing.

Teams Premium Is Not Teams Phone

Teams Premium is not a telephony licence.

Teams Premium is focused on enhanced meetings, webinars, security and related capabilities. It does not provide the Teams Phone licence required for business telephony. If you already have Teams Premium, that does not mean you have Teams Phone.

Entra ID P2 Is Not Teams Phone

Entra ID P2 is an identity and security licence, not a calling licence.

It covers capabilities such as Privileged Identity Management, Access Reviews and risk-based Conditional Access. It has nothing to do with enabling business phone calls in Teams. If you see a Microsoft add-on around the same price as Teams Phone on your invoice, check the actual product name before assuming it is your calling licence.

Audio Conferencing Is Not Teams Phone

Audio Conferencing is not a business phone system.

Audio Conferencing allows people to dial into Teams meetings using a telephone. Microsoft specifically distinguishes Audio Conferencing from Teams Phone. It does not give employees a business phone number for making and receiving normal external business calls.

What About Meeting Rooms, Reception Phones and Shared Devices?

Microsoft licenses shared devices and meeting room systems differently from individual users.

Licence	Typical use	Phone-system entitlement
Teams Shared Devices	Common-area phones and shared spaces	Yes
Teams Rooms Pro	Meeting rooms with video hardware	Yes
Teams Rooms Basic	Basic meeting room deployments	No

Microsoft licensing and PSTN connectivity are separate considerations. A device that needs to make or receive external calls still needs an appropriate PSTN connection and phone service. So if someone tells you that a meeting room is already “licensed for calling”, check which Teams Rooms licence it actually has.

Do Auto Attendants and Call Queues Need a Licence?

Auto attendants and call queues use resource accounts.

Each auto attendant and call queue needs a resource account, and external-facing services also require an appropriate phone number and PSTN configuration.

For example, a business with a main number, an after-hours menu and three department queues could require multiple resource accounts rather than simply one licence for the entire system.

This is something worth identifying when planning your Teams calling requirements because the number of users alone does not tell you everything about the licensing and configuration required.

How Do You Buy a Teams Phone Licence?

Teams Phone licences are purchased through Microsoft licensing.

You can purchase and assign the licence through the Microsoft 365 admin centre or through the organisation that manages your Microsoft licensing. The Microsoft licence is separate from the phone service and PSTN connectivity you obtain from your telecommunications provider.

This is also why two Teams calling quotes can appear to have different prices.

One quote might show: Microsoft licence + phone service while another might show only: Phone service

When comparing quotes, make sure you know which layers are included.

Monthly or Annual Teams Phone Licensing?

Microsoft offers monthly and annual subscription options.

Annual licensing generally provides the lower per-user cost, while monthly licensing offers greater flexibility.

For a business with a stable number of employees, an annual commitment may make sense. If your workforce changes regularly, you may prefer the flexibility of monthly billing even if the per-user cost is higher.

What Does Teams Phone Licensing Not Include?

Teams Phone licensing does not automatically provide your business with a complete PSTN phone service.

Depending on your chosen PSTN connectivity model, you may still need:

A business phone number
PSTN connectivity
Calling rates or included call allowances
Number porting
Emergency calling configuration
The underlying carrier or provider service

Microsoft confirms that telephone numbers are acquired through the PSTN service provider that connects the tenant to the public telephone network.

Teams Phone provides the phone-system capabilities inside Microsoft Teams. Your PSTN provider connects that phone system to the outside telephone network.

What Should You Check Before Buying Teams Phone?

Before adding another Microsoft licence, check your existing Microsoft 365 setup.

Ask:

Which exact Microsoft 365 plan are you using?
Does that plan include Teams?
Are you using an E5 licence?
Do your users actually need external business calling?
Are any users on frontline plans?
Do you have reception phones or shared devices?
Are your meeting rooms using Teams Rooms Basic or Pro?
How many auto attendants and call queues do you need?
Are you currently paying for a Microsoft add-on around $15 per user?
Are you currently using Telstra Calling for Office 365?
Does your phone provider’s quote include the Microsoft licensing layer?

These checks can help prevent unnecessary licence purchases and make sure the Microsoft and telecommunications components of your solution are being considered together.

Get a Straight Answer on Your Microsoft Teams Phone Licensing

Microsoft licensing can look complicated, but for many businesses the basic requirement is straightforward: identify the Microsoft 365 plan you already have, determine whether Teams Phone is included, and then add the appropriate calling service.

Broadconnect has been delivering business phone systems in Australia since 1988, with offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

We do not sell Microsoft licences, so there is no incentive for us to recommend a Microsoft licence that you do not need. We can review your existing Microsoft setup, explain what you already have, identify what needs to be added and help you put the underlying business calling service in place.

Call 1300 880 330 or request a quote to discuss your Microsoft Teams calling requirements.

Frequently Asked Questions About Microsoft Teams Phone Licensing

What Microsoft licence do I need for Teams calling in Australia?

Teams Phone Standard, at around $15 per user per month ex GST, added to your existing Microsoft 365 plan. Microsoft 365 E5 already includes it. That licence enables calling in Teams but does not provide a phone number or a connection to the phone network, which come from an Australian phone provider.

Does Microsoft 365 Business Premium include Teams Phone?

No. Business Premium is a security bundle covering Entra ID P1, Intune, Defender and compliance tooling. It includes no telephony. You add Teams Phone Standard to it exactly as you would to Business Basic or Business Standard.

Do I need Microsoft 365 E5 for Teams calling?

No. Every mainstream Microsoft 365 plan can add the calling licence. E5 is simply the only tier where it is already included, which means E5 customers pay nothing extra to Microsoft to enable calling.

My Microsoft 365 plan does not include Teams. What do I need?

You need Teams itself before you can add calling to it, as a standalone Teams Enterprise licence at roughly $5 to $8 per user per month ex GST. What comes next depends on the tier. On an E3 plan sold without Teams you then add Teams Phone Standard on top. On an E5 plan sold without Teams you do not, because the phone system entitlement is still included in the E5 licence and you would be paying twice.

I am on Microsoft 365 E5 without Teams. Do I need Teams Phone Standard?

Just a Teams Enterprise licence, at roughly $5 to $8 per user per month ex GST. Microsoft 365 E5 (no Teams) still includes the phone system application, so you do not need Teams Phone Standard as well. You then need a calling service from an Australian provider for numbers and connection to the phone network.

How much does Teams Phone cost in Australia?

Teams Phone Standard is from $15.00 per user per month ex GST on an annual commitment, at Australian list pricing as at July 2026. Monthly billing costs around 20 per cent more. Microsoft raised prices across the range on 1 July 2026, so older published figures understate it.

Can I use Microsoft Calling Plans in Australia?

Microsoft lists the bundled Teams Phone with Calling Plan SKUs on its Australian page in Australian dollars, but each one carries a footnote that the calling plan is available in specific markets only. Microsoft has historically not provided its own domestic calling service in Australia, appointing Telstra instead under a product now being withdrawn. Check the current market availability list before budgeting for a bundle, and assume you will buy Teams Phone Standard plus an Australian provider.

Can I buy Microsoft 365 E5 without the phone system?

No. Microsoft sells E5 variants without Teams and, historically, without Audio Conferencing, but all of them retain the phone system entitlement. There is no cheaper E5 that omits telephony, so any E5 customer already owns the calling licence and should not be quoted Teams Phone Standard on top.

Is Teams Premium the same as Teams Phone?

No. Teams Premium is a meetings and security add-on covering intelligent recap, advanced webinars, watermarking and translated captions. It contains no telephony. It costs around the same as Teams Phone Standard, which is why the two get confused on quotes.

Do meeting rooms and reception phones need Teams Phone?

No. The Teams Shared Devices licence used for common area phones and the Teams Rooms Pro licence used for meeting room systems both already include the phone system entitlement. Teams Rooms Basic does not. None of them include a phone number or a network connection, so shared devices that take external calls still need covering in your calling service.

Do auto attendants and call queues need a licence?

Each one needs a resource account, which Microsoft provides at no charge, plus a phone number if it takes external calls. The numbers are not free. A business with a main line, an after-hours message and three department queues needs five resource accounts.

Where do I buy the Teams Phone licence?

In your own Microsoft 365 admin centre, or through whoever manages your Microsoft licensing. It is billed by Microsoft and will not appear on your phone provider’s invoice, because most Australian phone providers are not Microsoft licence resellers.

Should I choose the monthly or annual term?

Annual is cheaper per user and suits a stable headcount. Monthly costs around 20 per cent more but can be cancelled at the end of any month. The catch with annual is that you can add seats at any time pro-rata but can only reduce them at the anniversary, so a business with fluctuating staff numbers can end up paying for licences it is not using.

What does the Teams Phone licence not include?

A phone number, call rates, a connection to the Australian phone network, number porting, and emergency calling configuration. All of those come from your Australian phone provider. The licence enables calling in Teams; it does not deliver a working phone service on its own.

Get Expert Advice on Microsoft Teams Licensing

We can review your existing Microsoft setup, explain what you already have, identify what needs to be added and help you put the underlying business calling service in place. Learn more about our Microsoft Teams & Flex solutions or request a quote to discuss your requirements.

Call: 1300 880 330
Email: hello@broadconnect.com.au
Follow us on Facebook, LinkedIn, and Instagram for updates and offers.

What Microsoft Licence Do You Need for Teams Calling in Australia?