Microsoft Teams Phone for SMBs: Direct Routing vs Calling Plans

The Teams Phone stack, in one paragraph

Microsoft Teams is a unified-communications application: chat, meetings, presence, file collaboration. Teams Phone is the optional add-on that turns it into a phone system — you can dial PSTN numbers, receive PSTN calls, ring on your laptop / mobile / desk phone, and have a single phone number ring multiple devices simultaneously. To make outbound and receive inbound from the public phone network, Teams Phone needs a connection to the PSTN. Microsoft sells you that connection in two ways: their own bundled Calling Plans, or an open-standards interface called Direct Routing that lets you plug in any qualified SIP carrier — including DIDHub.

1. Microsoft 365 licensing — what's included where

Microsoft 365 plan tiers (commercial, as of 2026):

So even if you're on E5, you still need to choose between Calling Plans and Direct Routing for the PSTN connection. Microsoft prices and licenses these as separate products.

2. Microsoft Calling Plans — the bundled option

Calling Plans are Microsoft's all-in-one PSTN package. You pay per user per month and Microsoft handles the carrier relationship, the DID, and the outbound minutes. Three flavors:

• Domestic Calling Plan — ~$12/user/month for ~3,000 min/month within the user's home country.
• Domestic + International Calling Plan — ~$24/user/month for ~3,000 domestic min and ~600 international min.
• Pay-As-You-Go — per-minute billing on top of a base fee.

What you get: a US/UK/EU DID for each user, outbound minutes, integration with Teams. Zero deployment effort — assign the license, the user gets a phone number, done.

The catches:

• Coverage is narrow. Microsoft Calling Plans cover ~33 countries (US, Canada, UK, most of EU, Australia, a few others). If you need a number in Israel, Brazil, India, UAE, Singapore, Mexico — you're out of luck on Calling Plans alone, even if you're on E5.
• Per-user pricing scales linearly. 50 users on Domestic Calling Plan = $600/month, just for outbound minutes. 100 users = $1,200/month. The cost grows with seats whether or not those users are actually heavy callers.
• You don't own the number. Calling Plans DIDs are issued under Microsoft's carrier — portability out is possible but slow and adds friction if you switch.
• Inbound minutes count toward your pool. A long inbound support call eats your minute allowance.

3. Direct Routing — bring your own carrier

Direct Routing is Microsoft's open-standards interface for plugging any qualified SIP carrier into Teams Phone. You connect a Session Border Controller (SBC) to Microsoft's voice infrastructure, the SBC peers with your carrier's SIP trunk, and Teams Phone routes outbound calls through that trunk to the PSTN.

What you get:

• Per-DID pricing. You pay for each phone number you actually use, not per Microsoft seat. A US number is $1.99/month. An Israeli number is $1.10/month. A toll-free is $1.50/month.
• Per-minute outbound, billed on actual usage. A US-to-US landline minute is $0.005. A US-to-mobile minute is $0.012. EEA-tier outbound (e.g. German DID calling Spain) starts at $0.019/min.
• Coverage in 130+ countries, not just the 33 Microsoft Calling Plans cover. Need a number in Bermuda, Bahrain, Bolivia, or Bangladesh? Direct Routing can.
• You own the numbers. Allocations are yours; ports out follow standard LNP without Microsoft approval friction.
• Inbound is not metered against a pool. Inbound minutes typically don't count, only outbound consumes per-minute usage.

The catches:

• Deployment complexity. Direct Routing traditionally required deploying an SBC (AudioCodes Mediant, Ribbon SBC, AnyNode) — either as a virtual appliance, a hardware unit, or a managed service. SMBs without a network engineer have historically gone with Calling Plans for this reason.
• You're picking the carrier. Quality and reliability now depend on the carrier you choose, not Microsoft. A bad carrier will give you bad calls.

The deployment-complexity catch is largely solved now. DIDHub (and a few peers) offer Direct Routing as a Service — no SBC for you to deploy, we operate the SBC layer in the cloud, you connect Teams to our hosted endpoint with a few PowerShell commands, and you're done.

4. The cost math — 50-user SMB making 1,000 minutes/user/month

Realistic numbers for a 50-user SMB (50 employees, US-based, ~1,000 outbound minutes per user per month, 80% domestic / 20% international):

Direct Routing on DIDHub saves ~$5,000/year for this 50-user SMB — not earth-shattering, but the gap widens fast as the company grows or as international calling becomes a bigger share of usage.

Where Direct Routing really pulls ahead:

• If you have low-volume users. Reception, kitchen, conference room, factory floor: each gets a Calling Plan license at $24/month even though they make 5 calls/month. Direct Routing pays per-minute — light users cost almost nothing.
• If you need DIDs Microsoft doesn't sell. Your Tel Aviv office needs a +972 3 number; your Singapore subsidiary needs a +65 number; your sales team wants a +1 415 San Francisco number for outbound. Microsoft Calling Plans simply doesn't cover most of these. Direct Routing on DIDHub does.
• If you have heavy international callers. The Domestic+Intl plan caps at 600 international minutes/user. Heavy callers blow past that and pay per-minute overage at high rates. DIDHub's per-minute international rates are ~30-50% lower than Microsoft's overage rates.

5. Which one should you choose?

The hybrid pattern is also legal: Calling Plans for the home country, Direct Routing for everywhere else. Microsoft supports having both PSTN connections active per user. Many global SMBs run this configuration — Calling Plans for US/UK convenience, DIDHub Direct Routing for Israel, Singapore, UAE, Brazil, etc.

6. How to deploy Direct Routing on DIDHub (the short version)

1. Get DIDs from DIDHub. Pick the countries / area codes you need. Toll-free if needed.
2. Connect Teams to DIDHub's hosted SBC. Three PowerShell cmdlets in Teams admin: New-CsOnlinePSTNGateway, New-CsOnlineVoiceRoute, Set-CsTenantHybridConfiguration. DIDHub provides the exact values.
3. Assign DIDs to users. One Set-CsPhoneNumberAssignment per user. Or use the DIDHub dashboard which writes them in bulk.
4. Test. Outbound, inbound, voicemail, transfer, hold, conference. All should work identically to Calling Plans — Teams doesn't know which PSTN backend it's talking to.

Total deployment time for a typical SMB: 30 minutes to a few hours, depending on how many users and how many DID countries.

For details, see DIDHub Teams Direct Routing, or talk to [email protected] for a guided setup.

Bottom line

Microsoft Calling Plans is a fine choice for the smallest, simplest deployments — one country, modest usage, no IT team. For everyone else — multi-country, multi-language, sales / support / contact-center workflows, AI voice agents, more than 30 users — Direct Routing on a wholesale carrier like DIDHub will be cheaper, more flexible, and unlock coverage Calling Plans simply doesn't offer. The deployment friction that historically kept SMBs on Calling Plans is largely gone now that managed Direct Routing is a thing.