Smart Savings: How to Optimize PSTN Calling within Microsoft Teams

Microsoft Teams is many things. Teams is a chat and collaboration platform. Teams can automate workflows. Teams supports video, voice, and content sharing meetings (PowerPoint Live does a great job sharing slides).

Teams is also a great phone system – what telecom people call a PBX (private branch exchange). However, if you are using Teams as your phone system there is a good chance you are overpaying.

Microsoft Teams Can Be a Great Phone System

Teams as your phone system does everything you would expect a phone system to do:

• Place and receive calls to any fixed or mobile number.
• Provide voice mail with customized greetings, and auto transcription, the ability to zero out to an operator.
• Hold, park, blind transfer, or consultatively transfer calls.
• Record calls on-demand.
• Support auto attendant and directory lookups based on DTMF (touch tones) or speech.
• Fully support emergency calling, including complying with Kari’s Law and the RAY BAUM’s Act.
• Offers desk phones from multiple manufacturers and supports calls on Windows and Mac PCs, iPads, and mobile phones with hundreds of USB or wireless headset choices.

Plus, because Teams is a unified communications platform, Teams Phone does some very interesting things:

• Supports federated presence and calling between different organizations.
• Allows users to easily control simultaneous ring and call forwarding rules for inbound calls.
• Easily allows individuals to setup delegates who can answer calls or place calls on their behalf (sometimes referred to as boss-admin functionality).
• Can escalate VoIP or federated voice calls to video calls, content sharing, and multi-participant meetings.
• Combined with a Copilot license can summarize, and answer questions related to a call transcript.

Teams Phone is Popular

There are over 320 million active monthly users of Teams and over 80 million Teams Phone users.

Key Office and Teams usage statistics include:

• 400 million paid commercial Office seats.
• 80% of Office users are active Teams users.
• 25% of Teams users are active Teams Phone users.
• 25% of Teams Phone users make regular use of PSTN calling (this gives us the 20 million active Teams Phone PSTN users).

enableUC, July 2024

Teams Phone Requirements

To make Teams your phone system, you need a Phone System license which can be purchased separately for USD 8/user/month and is included in the E5 SKU. For larger organizations you can negotiate the per user price for these licenses.

In addition to the Phone System license, you need a connection to the public switched network (PSTN) so that your users can receive and place calls to “regular” phone numbers.

Teams supports three PSTN connection mechanisms: Calling Plans, Direct Routing, Operator Connect.

In this article I focus on Microsoft’s Calling Plans (referred to as Calling Plan(s)).

Microsoft Calling Plans

A Calling Plan is a Microsoft subscription service that assigns a user a phone number and allows that user to make and receive calls to landline and mobile numbers worldwide.

Microsoft Calling Plans are simple, and quick to set up; however, many obscure details can impact your overall cost. If you are using Microsoft Calling Plans for PSTN connectivity you are likely overpaying, either because you have not taken advantage of new options or because you have not closely monitored changes in calling patterns.

This isn’t to say that Calling Plans are inherently a more expensive option compared to Direct Routing or Operator Connect. If properly configured, they may provide simplicity at a reasonable price. While this wasn’t always the case, newer options can make Calling Plans the right choice for even large organizations.

Calling Plan Options

A necessary first step is to understand the options that are available. Too many organizations have assigned the original Domestic Calling Plan Zone-1 which includes 3,000 outbound minutes per user for tenants in the U.S., Canada, and the UK, which often greatly exceeds the needs of most users. This represents 50 hours of outbound PSTN calling per user per month!

Within the U.S., other options include plans with 120 or 240 minutes per user.

The newest pay-as-you-go plan includes no outgoing minutes. All outgoing calls are charged based on the minutes used, with per minute rates varying based on the number called. Calls can be made to international numbers in 196 countries.

The Details

Details are critical to understanding and optimizing Microsoft Calling Plans. In determining your specific requirements, keep in mind:

• All Calling Plans provide unlimited incoming
• In the U.S. calls to any of the 50 states, Puerto Rico, or Canada are considered domestic calls.
• Calling Plan minutes are pooled across users.
  • However, only users in the same country/region with the same Calling Plan share a pool of minutes.
  • For example, if you mix and match 120-minute and 3000-minute plans, those are two separate pools of minutes shared by two distinct groups of users as there is also a Calling Plan type that includes 120 minutes per user without having the minutes pooled. So, make sure you know what plan you are buying.
• Calling plans that include a specific number of minutes include all taxes.
• Pay-as-you-go Calling Plan minute rates do not include tax.
  • In the U.S. calls to all U.S. numbers are billed at a rate of 3 cents/minute+tax to all U.S. numbers; calls to Puerto Rico are billed at a rate of 4 cents/minute+tax.
• Call duration is measured in seconds and is rounded up to the nearest minute.

Analyzing Your Data

There are a number of Teams usage reports available through the Teams Admin Center (TAC). Additional Teams reports are available through the Call Quality Dashboardwhich can also be analyzed using the PowerBI Quality of Experience Report (QER) templates.

The challenge is that these reports do not directly provide the details you need to determine the right Calling Plans to assign to specific users.

Here is the approach we use with clients to determine the optimal set of Calling Plan licenses. (This is intended as an overview and not a complete set of instructions.)

1. We use the PSTN Usage report (now labelled “PSTN and SMS (preview) usage”) from the TAC.
2. We select a custom date range. Teams seems to keep up to a year’s worth of calling data.
3. We then export the data to Excel.
4. In Excel we create two calculated columns:
   • A column that converts the call start time to a year format and month format, for example “2024-Mar.”
   • A column that converts the call duration in seconds to minutes, rounding up.
5. Because only outbound calls count against minutes, we filter the call log by call type “user_out”.
6. If you operate in multiple countries, you may need to filter by country (since different countries have different calling plan options).
7. We then create several pivot tables.
   • The key one groups rows based on User Principal Name (UPN) using the calculated column for year and month we created above and summing the calculated minutes column we created above.
   • This creates a table that shows the number of outbound minutes for each user for each month.
8. We then take the results from the pivot table, add a column that finds the max monthly minutes for each user, and sort it by max minutes (column descending).
9. Using this created table, we look to assign the smallest Calling Plan size that collectively covers the total number of minutes of all users.
   • For instance, we try assigning everyone a 120-minute plan, even if the top callers use more than 120-minutes.
   • Remember that Calling Plan minutes within the same tenant and plan are pooled across all users.
10. Once the optimal plans have been assigned, we use the organization specific enterprise agreement (EA) license rates to calculate a total license cost; this often involves evaluating multiple combinations and groupings of various Microsoft Calling Plans assigned to users.
11. Finally, we evaluate the alternative of using Microsoft’s pay-as-you-go plans, remembering to add tax to the final amounts.

The above process ensures that an organization is not overpaying for Calling Plan licenses. In some recent cases, organizations we worked with were using less than 5% of the minutes they were paying for, and even medium-sized organizations (with several thousands of users) could end up saving over $100K per year, which is definitely worth the analysis effort!

Final Thoughts

Teams Phone provides strong phone and exceptional collaboration features.

Microsoft has provided numerous Calling Plan options which are quick and easy to deploy. Newer options such as “pay as you go,” introduced in August 2022, provide further options.

If you have not re-evaluated your Calling Plan licenses in the past 12 months you should do so or enlist the expertise of someone who can help you do this analysis. Both calling patterns and pricing options have changed for many organizations between 2022 and today, which means you may be overpaying for the services you require.