Microsoft Teams has become the daily communication platform for a large proportion of Australian businesses. Chat, video, files, meetings — it handles them all. But making and receiving ordinary phone calls — calls to and from any number, on any network — requires one additional piece of the puzzle: a connection to the public telephone network, known as the PSTN.

There are two ways to add that connection to Teams. The first is Microsoft Calling Plans, where Microsoft itself acts as your telephone carrier. The second is Direct Routing, where you connect Teams to an Australian SIP carrier. Both options work — but for most businesses in Australia, Direct Routing is the more practical and cost-effective choice. Here's why.

Option 1: Microsoft Calling Plans

With Microsoft Calling Plans, you purchase per-user calling licences directly from Microsoft. These licences include a phone number and a pool of domestic calling minutes. Setup is relatively straightforward — everything is managed within the Microsoft 365 admin portal, with no third-party carrier to deal with.

The appeal is simplicity. Microsoft handles the number assignment, the carrier relationship, and the billing. For organisations that want everything under one vendor and one invoice, that can be attractive.

However, there are meaningful limitations for Australian businesses:

  • Number portability is limited. Porting existing Australian numbers to Microsoft Calling Plans is technically possible, but the process is far more constrained than with a local carrier. Many businesses find they cannot port their existing numbers at all, or face lengthy delays.
  • Per-minute costs are higher. Microsoft's calling rates are priced for a global market and tend to be higher than what you'd pay through an Australian SIP carrier, particularly for outbound calls and calls to mobile numbers.
  • No control over your carrier relationship. You are entirely dependent on Microsoft's infrastructure and pricing decisions. If Microsoft changes its calling plan pricing or availability, you have no alternative carrier to switch to without reconfiguring your phone system.
  • Geographic coverage. Microsoft Calling Plans availability and number types can vary by region. Australian businesses in particular have historically had fewer options compared to US or UK deployments.

Option 2: Direct Routing

Direct Routing connects your Microsoft Teams environment to the PSTN through a third-party SIP carrier — such as Caznet. The connection is facilitated by a device called a Session Border Controller, or SBC. The SBC sits between your Teams tenant in the Microsoft cloud and the SIP trunks provided by your carrier, translating protocols and managing the signalling required for calls to flow between the two systems.

From the end user's perspective, the experience is identical — they make and receive calls from within Teams, just as they would with Calling Plans. The difference is entirely in the back end, and that difference matters a great deal for cost, control, and flexibility.

How the technical path works

When a Teams user dials an external number, the call travels from Teams to the Microsoft cloud, across to the SBC, and from there out through the carrier's SIP trunks to the PSTN. Inbound calls follow the reverse path. The SBC handles the negotiation between Teams' signalling requirements and the carrier's SIP implementation, managing things like codec negotiation, DTMF handling, and call routing logic.

The SBC can be hosted in a number of ways — as a dedicated appliance on your premises, as a virtual machine in your infrastructure, or as a cloud-hosted instance managed by your carrier. For most Australian businesses, a cloud-hosted SBC provided by the carrier is the simplest option.

Why Direct Routing suits most Australian businesses

The practical advantages of Direct Routing for Australian businesses come down to four things:

  • You keep your existing numbers. Number portability with an Australian SIP carrier is well-established and works smoothly. Your existing geographic numbers can be ported to your SIP carrier and presented through Teams without disruption.
  • Better call rates. Australian SIP carriers price their call rates competitively in the local market. Per-minute costs for local, national, and mobile calls are typically lower than Microsoft's Calling Plan rates — and for businesses with meaningful outbound call volumes, that difference adds up quickly.
  • Local carrier relationship. Your carrier relationship stays with an Australian business that understands the local market, the local number format requirements, and the local regulatory environment. If something goes wrong, you're talking to a team that can actually help, rather than navigating a global support queue.
  • More flexibility. Direct Routing gives you far more control over call routing — including advanced hunt groups, time-of-day routing, overflow handling, and integration with call recording or compliance systems. None of this requires Microsoft to support it directly.
Caznet provides Direct Routing through our Microsoft Teams Calling service. We handle the SBC configuration, number porting, and SIP trunk provisioning — and we connect Teams to the same carrier infrastructure we use for our business SIP trunks. One local team manages the whole setup.

When Calling Plans might make sense

There are scenarios where Microsoft Calling Plans is the more sensible choice. If your organisation is predominantly US-based, Calling Plans are mature, well-supported, and competitively priced in that market. If you're a very small business starting from scratch with no existing numbers to port, the simplicity of Calling Plans may outweigh the cost and flexibility advantages of Direct Routing. And if your IT management is entirely handled through Microsoft 365 and you have no existing carrier relationship, keeping everything within one vendor can reduce administrative overhead.

But for the majority of Australian businesses — particularly those with existing phone numbers, meaningful call volumes, and a preference for a local carrier relationship — Direct Routing is the right answer.

Making the switch

The transition to Teams calling via Direct Routing is straightforward when handled correctly. The key steps are: assigning the right Microsoft Phone System licences to your users, provisioning and configuring the SBC, porting your existing numbers to the SIP carrier, and setting up your dial plans and call routing within Teams. Done properly, the cutover can be staged so that staff experience no disruption at all.

If you're currently using Teams for chat and meetings and are wondering whether it can also replace your phone system, the answer for most Adelaide businesses is yes — and Direct Routing is the way to do it on your terms, with an Australian carrier, at Australian rates.