Microsoft Teams Phone is the most architecturally complex component of the Microsoft 365 licensing stack. Most organizations understand it least and as a result overpay for it most consistently. Phone System licenses, Calling Plans, Audio Conferencing add-ons, Direct Routing deployments, Operator Connect agreements — each layer can be independently mis-sized, and the combination typically generates more waste than any other Microsoft 365 cost category outside of inactive base licenses.
This is compounded by the fact that telephony is often managed by IT infrastructure teams who are optimizing for reliability rather than cost, and purchased under agreements that are rarely revisited until a contract expires. Finance teams see a monthly charge for “Microsoft Teams Phone” that they cannot easily interpret without understanding what is actually being consumed.
The Phone System license: who actually needs it
Phone System ($8/user/month) is the Microsoft license that enables PSTN connectivity through Teams — the ability to make and receive calls to and from the public telephone network. Without it, Teams is an internal communication tool only.
The question is not whether the organization needs Phone System, but whether every user assigned it actually makes or receives PSTN calls. In most deployments, there is a significant population of users — back-office roles, warehouse workers, employees who communicate exclusively through Teams meetings and chat — who were assigned Phone System as part of a blanket rollout but who have never made a PSTN call.
Microsoft’s Teams admin center provides call activity reports under Analytics and Reports > Usage Reports > PSTN and SMS usage. This report shows, by user, the number of outbound and inbound PSTN calls, total minutes, and last call date. Users with zero calls in the last 90 days are Phone System reclamation candidates. The Phone System license can be removed without affecting their Teams meeting and collaboration functionality.
Calling Plans: the included minutes nobody uses
Microsoft’s Domestic Calling Plan ($8/user/month for 120 minutes) and Domestic and International Plan ($24/user/month) provide pre-allocated PSTN calling minutes. The 120-minute domestic plan sounds limited but is more than sufficient for most office workers who use Teams calling occasionally rather than as their primary communication channel.
The waste pattern is different here: it is not about users who don’t have calling needs at all, but about users who have calling needs that are far below what the plan includes. A user who makes 15 minutes of PSTN calls per month is assigned a 120-minute plan and paying $8/month — the per-minute cost is over $0.50/minute, versus consumption-based PSTN rates through Operator Connect or Direct Routing that are typically $0.01 to $0.03/minute.
For organizations where most users have light calling needs, Operator Connect or Direct Routing deployments with pay-as-you-go PSTN rates can be significantly cheaper than Calling Plans at scale. The tradeoff is implementation complexity — but for organizations with 200+ calling users, the economics often favor a Direct Routing architecture with a SIP trunking provider.
International add-ons: the widest waste gap
The international calling add-on — which provides included minutes for calls to international destinations — is the highest unit-cost per seat in the Teams Phone stack and the most frequently over-provisioned.
The typical deployment scenario: a few employees regularly call international numbers. IT assigns the international add-on to all users in relevant job categories rather than identifying specific individuals with international calling needs. A sales team of 40 people might have 8 who regularly call Europe and Asia, but all 40 are assigned the international add-on.
At $12/user/month, the waste from over-provisioning international add-ons across 32 users who don’t need them is $4,608 per year — for what is effectively a convenience decision made during onboarding and never revisited.
The PSTN and SMS usage report in Teams Admin Center distinguishes domestic from international call volume per user. Users with zero international minutes in the last 90 days should have the international add-on removed. International calling can be re-enabled on demand in minutes if a business need arises.
Teams Rooms: Pro versus Basic
Teams Rooms is the licensing model for conference room devices — Surface Hubs, third-party hardware running Teams Rooms, and video conferencing systems. Teams Rooms Pro ($40/room/month) includes advanced device management, meeting room analytics, conditional access policies, and the ability to join meetings from other video conferencing platforms (Cisco, Zoom interoperability).
Teams Rooms Basic ($0, included) provides the core join-and-meet functionality that the majority of conference rooms need.
In most organizations, only a subset of conference rooms need Pro: executive conference rooms with cross-platform meeting requirements, large boardrooms that need advanced analytics, or rooms with certified hardware that specifically requires Pro for full feature access. Standard small and medium conference rooms that are used for routine Teams calls and internal meetings have no functional need for the Pro tier.
The Teams admin center’s device inventory lists all Teams Rooms devices with their current license tier. Organizations that deployed Pro broadly during rollout without differentiating room tiers should run an assessment of which rooms actually need Pro features versus which are Basic candidates. At $40/room/month, even 10 rooms moved from Pro to Basic saves $4,800 per year.
The utilization data you need
Microsoft’s Teams admin center is the primary data source for calling optimization. The key reports:
PSTN Usage Report: User-level call volume (outbound + inbound), total minutes, and dates. Available for 28 or 90-day windows. This identifies Phone System and Calling Plan over-provisioning.
Teams Device Usage Report: Which devices users are connecting from. Identifies room devices with low utilization.
Operator Connect / Direct Routing call records: Available through the Calls API in Graph for organizations on these architectures. Per-user and per-number call volume and minutes.
The combination of these reports gives a complete picture of who needs what tier of calling capability and where the current assignment doesn’t match actual use. The data is available to any Teams admin and requires no additional tooling — just the will to pull and act on it.
Telephony optimization is often the most financially impactful Microsoft 365 cost action available to mid-market organizations, precisely because it has historically been managed for uptime rather than cost and because the usage data has been available but unread.