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Teams Phone Licensing with Business Premium or E3: What You Have to Add
Microsoft 365 Business Premium and E3 include Teams, but they don't include a phone system that calls regular phone numbers. For that you add Teams Phone, and usually a way to connect to the phone network. Here's exactly what to add, what's free, and what's easy to miss.
The short answer
- You need a Teams license. Microsoft says Microsoft 365 Business suites are sold both with and without Teams. New Enterprise customers buy E3 or E5 "(no Teams)" plus a separate Teams Enterprise license (Teams add-on licensing).
- You add Teams Phone for each user who needs a phone number. Microsoft says calling landlines and mobiles through the PSTN is available with Teams Phone Standard, Teams Phone with Calling Plan, or Microsoft 365 E5 (Microsoft Teams Phone FAQ).
- You choose how to connect to the phone network: a Microsoft Calling Plan, Operator Connect, Teams Phone Mobile, or Direct Routing. See Calling Plan vs Operator Connect vs Direct Routing.
The licenses, piece by piece
| License | What Microsoft says it does | Who needs it |
|---|---|---|
| Teams (in your suite, or standalone) | Chat, meetings, and Teams-to-Teams calls | Everyone |
| Teams Phone Standard | An add-on for a hosted phone system: cloud voicemail, call forwarding, call transfer, auto attendants, call queues, caller ID | Each user with a phone number, if you don't buy the Calling Plan bundle (for example with Operator Connect or Direct Routing) |
| Teams Phone with Calling Plan | An add-on bundle of Teams Phone plus a Microsoft Calling Plan, with Microsoft as your carrier | Each user with a phone number, if Microsoft is your carrier |
| Communication Credits | An add-on that gives a monthly pool of minutes for PSTN calls, for example when Calling Plan minutes run out, or for toll-free numbers on auto attendants and call queues | Optional |
| Audio Conferencing | Lets people dial in to Teams meetings by phone. Microsoft notes it doesn't require Teams Phone | Optional, and separate from Teams Phone |
Descriptions from Microsoft's Teams add-on licensing article.
Microsoft's licensing table lists Business Basic, Business Standard, and Business Premium (and Teams Essentials with Entra ID) as eligible for both Teams Phone with Calling Plan and Teams Phone with a separate PSTN option (Teams add-on licensing).
What's free, and what isn't
- Auto attendants and call queues each need a resource account with a Microsoft Teams Phone Resource Account license. Microsoft says there's no longer any cost for these licenses, and that you shouldn't assign Teams Phone Standard to a resource account (Teams Phone Resource Account licenses). You still go through checkout to get them, at zero cost (Manage resource accounts).
- Shared phones (a lobby or warehouse phone) use a Teams Shared Space license, which Microsoft says was called Teams Shared Devices before April 2026 (Teams Shared Space licensing).
- Price: microsoft.com lists Teams Phone with Calling Plan (US) at $17.00 user/month and Teams Phone with domestic and international calling at $34.00 user/month, paid yearly. Both note a separate Teams license is required (Microsoft Teams Phone, checked 2026-10-22). I haven't listed Teams Phone Standard on its own: check that page or your reseller.
How to buy and assign
- In the Microsoft 365 admin center, buy the add-on from the Marketplace page (Try or buy a Microsoft 365 subscription), or through your partner.
- Assign it under Billing > Licenses (Assign licenses). Only license the people who actually need a phone number.
- Get the free resource account licenses before you build an auto attendant or call queue.
Business Premium or E3 for a phone-heavy office?
Teams Phone is an add-on either way, so the phone system on its own isn't a reason to pick one suite over the other. Microsoft says a phone system and Audio Conferencing are included in Microsoft 365 E5 and Office 365 E5 (Teams Phone FAQ), but E5 is a much bigger purchase. For the rest of the comparison, see Business Premium vs E3.
More in the Teams Phone series: Calling Plan vs Operator Connect vs Direct Routing · Auto attendant and call queue setup · Port your business number to Teams · Teams call quality basics · Teams-certified headsets and desk phones. Choosing a Microsoft 365 plan first? See Business Premium vs E3.
Sources
- Microsoft Teams add-on licensing (Microsoft Learn)
- Microsoft Teams Phone Resource Account licenses (Microsoft Learn)
- Manage resource accounts (Microsoft Learn)
- Microsoft Teams Shared Space licensing (Microsoft Learn)
- Get phone numbers for your users (Microsoft Learn)
- Try or buy a Microsoft 365 for business subscription (Microsoft Learn)
- Assign Microsoft 365 licenses to users (Microsoft Learn)
- Microsoft Teams Phone plans, pricing and FAQ (Microsoft)
Where to buy: from Microsoft on the Teams Phone page, in the Microsoft 365 admin center, or through a Microsoft partner. These are ordinary links, not affiliate links.