Microsoft Teams vs 3CX: Which Phone System for Your Business?

This guide compares Microsoft Teams Phone and 3CX across architecture, cost, features, and fit for Australian businesses. Both are software-based phone systems, but that is roughly where the similarity ends. One is a cloud-only Microsoft add-on that works best when your whole team already lives in Teams. The other is PBX software that gives you more control, lower per-seat cost, and real flexibility, but asks more of you or your IT provider to set up and maintain. By the end of this guide you will have a clear answer on which system fits your situation, a realistic cost picture in AUD, and a plain-English explanation of the architecture differences that drive the comparison.

Quick Verdict

Teams Phone wins for businesses where the entire team already uses Microsoft 365 daily, where IT manages the Microsoft licensing stack, and where video conferencing and team collaboration are more important than pure call handling. 3CX wins for businesses that want a full-featured PBX with lower per-seat cost, more control over their setup, and a trusted IT provider or MSP who knows the platform. If you are a small business with no IT department and just need a reliable phone system, neither Teams Phone nor 3CX is your best starting point. A purpose-built hosted VOIP provider will get you running faster, cheaper, and with less ongoing management.

What Each System Actually Is

Microsoft Teams Phone

Microsoft Teams is a collaboration platform: chat, video meetings, file sharing. Out of the box, it cannot call regular phone numbers. Microsoft Teams Phone (previously called Phone System) is the add-on licence that enables PSTN calling from within Teams. Once activated, the Teams app on your desktop, laptop, or mobile becomes a softphone. Staff make and receive calls to any number through the same interface they use for everything else.Teams Phone is cloud-only. Microsoft hosts everything. There is no PBX server to manage. The trade-off is that you are entirely inside Microsoft's ecosystem and pricing structure. To make Teams Phone work you need a Microsoft 365 licence (Business Basic, Business Standard, or E3 at minimum), the Teams Phone Standard add-on, and a calling architecture to reach the PSTN. That calling architecture can be Microsoft Calling Plans (Microsoft provides the AU numbers and carries the calls), Operator Connect (a Microsoft-certified carrier supplies the trunk), or Direct Routing (your own AU SIP trunk via a certified session border controller). Each option has different cost, control, and complexity trade-offs.

3CX

3CX is PBX software. It runs on a server. That server can be your own hardware on-site, a cloud VPS you or your IT provider manages, or 3CX's own hosted cloud. Unlike Teams Phone, 3CX is not tied to any specific ecosystem. It uses open SIP standards to connect to whichever AU SIP trunk provider you choose for your PSTN calls. The PBX software handles all the call routing, auto-attendant, ring groups, call queues, voicemail, and recording logic. The carrier just delivers the calls.3CX has been widely deployed in Australia. Many IT providers and MSPs hold 3CX partner status, which means they can supply, configure, and manage a 3CX instance as part of a broader managed services contract. For an Australian SMB with an existing IT relationship, 3CX is often the path of least resistance to a properly configured business PBX.

Architecture: The Difference That Explains Everything

The architecture difference matters more than any feature list. Teams Phone locks you into Microsoft's cloud and Microsoft's pricing decisions. If Microsoft changes its licensing structure (which it does, periodically and sometimes significantly), your phone system costs change too. 3CX gives you more independence: you choose your carrier, you choose your hosting, and you can switch either without replacing your entire phone system. That flexibility has real value, but it also requires someone to manage the configuration.

Cost Comparison at 10 Seats (AUD)

The following estimates are based on current published pricing as at March 2026. All figures are in AUD excluding GST. Call volume assumes a typical SMB pattern: moderate outbound, inbound AU geographic numbers. The cost gap at 10 seats is substantial: Teams Phone with Calling Plans runs roughly $354-384 per month all-in, while a provider-hosted 3CX instance with SIP trunk typically comes in at $100-160 per month. At 50 seats, the gap widens further in 3CX's favour because the M365 and Teams Phone Standard licences scale linearly per seat. 3CX licensing is tiered by simultaneous calls, not by seat count, which changes the economics significantly at higher headcounts.Self-hosted 3CX reduces the monthly outgoings further, but the server needs to be provisioned, patched, and maintained. For businesses without dedicated IT, that hidden cost often erodes the savings. The right comparison is not software licence cost: it is total cost of ownership including setup, configuration, and ongoing management.

Feature Comparison

Who Should Choose Teams Phone

Teams Phone makes sense when phone calls are one channel among many in a Microsoft-centric workflow. If your team already lives in Teams for chat, video, and file sharing, adding calling removes the need to switch applications or manage a separate phone system. The integration value is real: voicemail in your Teams inbox, calling a contact from your Outlook calendar, Teams on your phone for mobile staff.The strongest case for Teams Phone is businesses where IT already manages a Microsoft 365 deployment, video conferencing is important, staff are primarily desk workers, and the business has a Microsoft partner or internal IT person who understands Teams admin. In those circumstances, Teams Phone adds genuine capability to an existing platform with manageable incremental cost.Teams Phone is a weaker fit when: the business does not already pay for M365, call handling is complex (multi-level IVR, time-based routing, multiple queues), cost per seat is a primary constraint, or the business needs certified desk phones at a reasonable price. The Teams-certified phone hardware list has fewer options and typically costs more than equivalent SIP phones.

Who Should Choose 3CX

3CX is the better fit for businesses that want a proper, full-featured business phone system without being tied to Microsoft's ecosystem or pricing. The key condition is that you or your IT provider has the capability to configure and maintain it. 3CX is not hard to run when properly set up, but it is not self-configuring and it is not plug-and-play.3CX is a strong choice for: businesses with 10-100 seats where per-seat cost matters, businesses with an IT provider who already manages 3CX for other clients (experience makes deployment much faster), businesses that need complex call routing or a proper IVR without paying enterprise prices, and businesses that want to use existing SIP-compatible handsets or choose from a broader hardware range.In Australia, 3CX has a well-established channel presence. Many MSPs hold 3CX partner status and can deploy and manage the system as part of a managed IT package. If your IT provider already manages your servers, networking, and Microsoft 365 licensing, asking them to add a 3CX instance is a natural extension of that relationship.

Who Should Choose Neither

If you are a business with 1-10 seats, no IT department, and no existing Microsoft 365 subscription, neither Teams Phone nor 3CX is your best starting point. Both require more setup and ongoing management than a purpose-built hosted VOIP provider. A specialist Australian VOIP provider can give you hosted PBX, auto-attendant, ring groups, call recording, and 1300 number support with a guided setup process and no server to manage. The monthly cost is typically lower than Teams Phone and comparable to a provider-managed 3CX instance, but with significantly less friction.

Australian Market Context

Teams Phone Calling Plans are available in Australia, but they are less competitive than using a dedicated Australian SIP trunk provider via Direct Routing. Microsoft's published AU Calling Plan pricing sits higher than what most AU SIP trunk providers charge for equivalent call volumes. The Direct Routing path gives better economics but requires a certified session border controller (SBC), which is typically managed by a telco or MSP.3CX has been deployed widely across Australian SMBs and mid-market organisations for over a decade. The local IT channel understands it well. Number porting via an AU SIP trunk provider is generally faster than porting to Microsoft Calling Plans, where port timelines depend on Microsoft's wholesale carrier relationship. For businesses porting multiple numbers, this timing difference can matter operationally.Both systems support 1300 numbers via their respective calling architectures. With Teams Phone, 1300 numbers are delivered via the carrier (Operator Connect provider or Direct Routing SIP trunk). With 3CX, the SIP trunk provider handles 1300 number configuration. In practice, 3CX via an AU SIP trunk is often easier to configure for 1300 routing, and the carrier options are broader.Australia's PSTN copper shutdown is complete. All business calls now travel over IP regardless of what system you use. The relevant question is not whether to use VOIP but which VOIP architecture fits your business. Both Teams Phone and 3CX are fully NBN-compatible. Call quality on either system depends on your internet connection quality, not the phone platform itself.

What Most Businesses Get Wrong

The most common mistake is starting with the ecosystem instead of the use case. Businesses that already use Microsoft 365 often assume Teams Phone is automatically the right choice because it is already inside the platform. That is only true if calling is genuinely secondary to collaboration. For businesses where inbound call handling, ring group routing, and call recording are central to operations, Teams Phone's call management configuration is more cumbersome than 3CX's, even if Teams is already deployed.The second mistake is underestimating the total cost of Teams Phone. The per-seat licence costs stack up: M365 Business Basic plus Teams Phone Standard plus an AU Calling Plan adds up to $35-38 per seat per month before any hardware. Businesses comparing this against a headline 3CX provider cost often miss that the Teams number includes calling, while the 3CX licence cost does not. Do the full all-in comparison, not the licence-only comparison.The third mistake is assuming 3CX is a DIY product. 3CX can be self-hosted and self-managed by a technically capable operator, but most Australian SMBs running 3CX have an IT provider managing it. The economics of 3CX depend partly on that IT relationship. If you do not have an IT provider who knows 3CX, factor in the cost of finding one and the setup time before comparing it favourably against Teams Phone.

Your Next Steps

Use this checklist to identify the right direction before talking to any provider:1. Check your current Microsoft 365 status. If you already pay for M365 Business Standard or E3, Teams Phone Standard is a relatively small incremental cost and the integration value is real. If you do not currently pay for M365, the licence stack cost makes Teams Phone much harder to justify on call handling alone. 2. Map your call handling requirements. If you need multi-level IVR, complex ring group logic, or granular time-based routing, test Teams Phone admin before committing. 3CX is generally more flexible here. If you mostly need basic inbound call handling with hold and voicemail, both systems handle it. 3. Talk to your IT provider. If you have an IT provider, ask whether they are a 3CX partner. If they are, 3CX is probably the path of least resistance. If they manage your Microsoft 365 and are comfortable with Teams admin, Teams Phone is the lower-friction option. 4. Get an all-in quote for both. Ask for the monthly total including licences, SIP trunk or Calling Plan, hardware (if needed), and ongoing management. The system that looks cheaper on paper is often not the cheapest in practice. 5. Consider a specialist VOIP provider first. For businesses under 10 seats with no IT department, a hosted VOIP provider removes the complexity of both options and typically costs less. Use the Get a Recommendation page to describe your situation and get a specific suggestion.

Can I use Teams Phone without a Microsoft 365 subscription?

No. Teams Phone requires a Microsoft 365 licence (Business Basic, Business Standard, or E3 at minimum) plus the Teams Phone Standard add-on. The M365 licence is the base requirement: without it, there is no Teams app and no Teams Phone capability. If you do not currently pay for Microsoft 365, the combined licence cost makes Teams Phone significantly more expensive than a standalone VOIP or 3CX solution.

Is 3CX free?

3CX has a free tier for small deployments (up to 10 users and 4 simultaneous calls). Above that, 3CX is licensed annually by the number of simultaneous calls the system can handle. The licence is typically supplied by an IT provider or managed VOIP provider as part of a monthly service. The software itself does not charge per seat, which is why 3CX becomes increasingly cost-competitive against Teams Phone at higher seat counts. Note that the 3CX licence does not include SIP trunk costs: you pay separately for your calling service.

Which system is easier to set up?

Teams Phone is easier to activate if you already have a Microsoft 365 tenant with an IT administrator who knows Teams admin. The setup is cloud-based with no server to provision. 3CX requires a server (or a provider-hosted instance), initial configuration of extensions, trunks, and call routing, and ongoing software maintenance. For a business without existing IT support, Teams Phone has lower initial setup complexity. For a business with an IT provider who knows 3CX, the setup time is comparable.

Can I keep my existing phone numbers when switching to either system?

Yes. Both Teams Phone and 3CX support Australian number porting. With Teams Phone via Calling Plans, you port your numbers to Microsoft. With Teams Phone via Direct Routing, you port to the SIP trunk carrier. With 3CX, you port to your chosen AU SIP trunk provider. Porting timelines in Australia are typically 5-15 business days depending on the losing carrier and number type. Geographic numbers (02, 03, 07, 08) and 1300 numbers can both be ported. The ACMA regulates porting in Australia and carriers must comply with number portability requirements.

Does Teams Phone support 1300 numbers in Australia?

Yes, but the configuration depends on your calling architecture. With Microsoft Calling Plans in Australia, 1300 number support is limited: Microsoft does not natively provide 1300 numbers via Calling Plans in all cases. Using Operator Connect or Direct Routing with an AU SIP trunk provider gives you full 1300 number support, including porting existing 1300 numbers. 3CX with an AU SIP trunk provider has full 1300 number support in all deployment scenarios. If 1300 numbers are central to your business, confirm the configuration with your provider before committing to a calling architecture.

How does call quality compare between Teams Phone and 3CX?

Call quality on both systems is primarily determined by your internet connection, not the phone platform. Both use VoIP over your NBN connection. Jitter, packet loss, and upload speed all affect call quality regardless of which system you use. The codec choices differ: Teams Phone uses Microsoft's media negotiation; 3CX lets you configure codec priority (G.711, G.729, Opus) which gives more control over quality versus bandwidth trade-offs. On a stable NBN connection with adequate upload speed, both systems deliver comparable call quality. On a marginal FTTN connection, codec configuration in 3CX gives you slightly more tuning options.

What happens to Teams Phone or 3CX if the internet goes down?

Both systems rely on your internet connection. If your NBN goes down, neither system can receive or make calls via the PSTN. This is true of all hosted VOIP solutions. The mitigation strategy is the same for both: configure call forwarding to a mobile number as a fallback (both systems support this), and consider a 4G backup router for business-critical sites. Teams Phone can forward to any number from the Teams admin console. 3CX has built-in mobile failover routing in its call queue and ring group settings.

Can 3CX and Teams Phone work together?

3CX has a native Teams integration available on its higher-tier licences. This allows staff to receive and make 3CX calls from within the Teams interface, without requiring Microsoft Calling Plans or Teams Phone Standard licences. It is a way to get external PSTN calling inside Teams at lower cost than the full Teams Phone stack, using 3CX as the PBX and Teams as the front-end. The integration is not as deep as native Teams Phone, but it is a legitimate option for businesses that want the Teams interface without the Teams Phone licence cost.

Related Guides

For more detail on the individual systems and related decisions, see our guide to Microsoft Teams Phone system setup and licensing in Australia, Teams Phone pricing in AUD across all licence tiers, our full 3CX review for Australian businesses, and how to compare hosted PBX vs on-premise PBX options. If you are comparing Teams Phone against a general hosted VOIP provider rather than 3CX specifically, see our Teams Phone vs hosted VOIP guide for the broader comparison. For help choosing between all options, see our guide to the best VOIP phone system for small business in Australia or use the Get a Recommendation page.