This guide covers the real cost of Telstra Business phone services for small businesses, why so many businesses are looking elsewhere, and what the alternatives actually look like in 2026. Need to Know Comms is an independent Australian publishing project with direct experience in business communications infrastructure across NBN connection types and cloud phone deployments. By the end of this page you'll understand what you're paying for, what you could have instead, and how to make the switch without losing your phone numbers. You're not behind for asking these questions. The industry made this unnecessarily complicated on purpose.
Why Businesses Are Leaving Telstra
The most common complaints we hear from small business owners considering a switch away from Telstra aren't about call quality or coverage. They're about everything around the service.
Price and bundling complexity. Telstra Business phone pricing is structured around bundled packages. On the surface, the bundle looks like good value. But when you break out exactly what you're paying for, many small businesses find they're paying for features they don't use, call volumes they don't make, and hardware they didn't really need.
Product discontinuations. Telstra has steadily retired its small business phone products over recent years. Telstra's copper PSTN network -- the traditional landline -- has been shut down nationwide. ISDN services are gone. Products that small businesses relied on for years have been wound up, often with limited notice, leaving owners scrambling to find something new.
Being pushed toward enterprise solutions. Telstra's flagship business collaboration product, Adaptive Collaboration (formerly Telstra Calling for Microsoft Teams), is built for larger organisations with IT departments. For a 3-person trade business or a small medical practice, the feature set is overkill and the configuration complexity is a genuine burden.
Support experience. Telstra's consumer support is handled by large offshore call centres. For small business customers without a dedicated account manager, reaching someone who can actually solve a technical phone problem is often a 45-minute hold queue experience. This isn't unique to Telstra -- it's an industry-wide problem with large carriers. But for a business owner who just wants their phones to work, it's a significant frustration.
Lock-in. Multi-year contracts, early termination fees, and hardware tied to the Telstra network are common. Businesses that want to switch find themselves either waiting out a contract or paying to leave.
The PSTN shutdown is already done. Australia's copper landline network was switched off in 2025. If your business still has a "landline" today, it's being delivered over NBN via a VOIP service -- either through Telstra or through your ISP. The question isn't whether to move to VOIP. You're already on it. The question is whether you're on the right VOIP service.
What Telstra Business Phone Actually Costs
Let's break down the actual cost of a Telstra Business phone service for a small business with 3-5 staff. Prices are AUD including GST.
Line rental. Telstra's business phone line rental starts at approximately $30-$45 per month per line, depending on the product tier. If you have two lines (to handle simultaneous calls), that's $60-$90 per month in line rental alone, before any calls are made.
Call packs. Telstra offers call plans that bundle national and mobile call minutes. Entry-level call packs for business start at around $20-$40 per month. If your call volume is low, you may be paying for minutes you never use. If your volume is higher, you may find yourself on a more expensive tier.
Hardware. Telstra business handsets -- whether purchased outright or included in a bundle -- typically add $15-$30 per handset per month if financed through the plan. An outright purchase is $150-$400 per handset depending on the model. Hardware that's bundled into a Telstra plan is often locked and cannot easily be repurposed if you switch providers.
Total monthly cost at entry level. For a typical 3-seat small business with two lines and a modest call pack, realistic monthly costs are in the $120-$200/month range before any special features. Some businesses are paying significantly more once you add optional features like call management, voicemail, or additional lines.
What this adds up to annually. At $150/month, that's $1,800 per year for a phone system that, for many small businesses, is delivering basic inbound and outbound calling and nothing more.
Want to see how your current spend compares? Use the VoIP Cost Calculator to estimate what a modern cloud phone system would cost for your team size and call volume.
What You're Actually Paying For vs What You Need
Here's a framework for assessing what your current phone spend is actually buying you.
What you're likely paying for: Line rental (access to the phone network), a call plan (minutes for outbound calls), possibly a handset repayment, and potentially a monthly fee for features like voicemail.
What most small businesses actually need: The ability to receive and make calls simultaneously across a small team, a basic voicemail, the option to route calls after hours, and a professional experience for customers calling in.
What most small businesses don't need but may be paying for: Enterprise-grade unified communications platforms, extensive Microsoft Teams integration for teams that already use a simple chat tool, large call allowances for businesses that mostly receive calls, or hardware locked to a carrier network.
The honest question to ask is: if you could rebuild your phone system from scratch today, with the knowledge of exactly what your business actually uses, what would you choose? For most small businesses with 1-10 staff handling a moderate call volume, the answer is not a Telstra enterprise bundle. It's a focused, cloud-based phone system with a flat monthly cost and no long-term lock-in.
The Alternatives: Cloud Phone Systems Explained Simply
The category that has replaced traditional business phone lines for most small businesses is called a hosted VoIP (Voice over Internet Protocol) service, sometimes called a cloud PBX or cloud phone system. This is not a new or experimental technology. It has been the default for growing Australian small businesses for several years.
How it works in plain English. Your phone calls travel over your internet connection rather than a dedicated phone line. Your phone system -- the thing that manages call routing, voicemail, hold music, and extensions -- is hosted by a specialist provider on their servers ("in the cloud"), rather than a box bolted to the wall in your office.
What this means for your business. You don't need a separate phone line from Telstra or your ISP. Your desk phones plug into your office network (the same network your computers use) and register with your chosen cloud phone provider. Staff working from home or on the road can answer business calls on their mobile or laptop using an app. All of this is managed through a web-based admin portal.
Features that come standard. Most cloud phone systems include call forwarding, voicemail-to-email, hold music, multiple extensions, a basic auto-attendant ("press 1 for sales, press 2 for support"), ring groups (so multiple staff ring simultaneously), and real-time call statistics -- features that would cost considerably more on a traditional Telstra business plan if they're available at all.
For more detail on how cloud phone systems compare to traditional options, see our guide: VoIP vs Traditional Phone Systems Australia.
What to Look For in a Replacement
Not all cloud phone providers are the same. Here is what matters for a small Australian business.
Australian-owned and operated. When something goes wrong (and occasionally it will), you want to speak to an Australian support team who understand how NBN works, how number porting works in Australia, and what Australian Consumer Law requires from a telco. Offshore support desks reading from a script cannot help you with a porting delay involving an Australian carrier.
Australian-based support. Look for a provider where you can reach a real person in Australia by phone during business hours. Check reviews. Ask the question directly before signing up.
Month-to-month contracts. There is no reason to lock into a long-term contract for a cloud phone service. The technology is mature, competition is real, and month-to-month billing protects you. If a provider won't offer month-to-month, that is a red flag.
Number porting included. Switching providers should not mean losing your existing phone number. Number porting is the process of transferring your existing number to a new provider, and it is your legal right under ACMA regulations. Any serious Australian VOIP provider will handle number porting as a standard part of onboarding. Check the process and timeframes upfront. See our full guide: Number Porting Australia: How It Works.
Right-sized feature set. A 4-person office doesn't need a contact centre platform. Look for a provider who offers a plan that matches what your business actually does, with a clear path to add features as you grow -- without forcing you to buy them all upfront.
NBN-aware provisioning. Your cloud phone quality depends on your internet connection. A good provider will ask about your NBN connection type, advise on bandwidth requirements, and help you configure Quality of Service (QoS) settings on your router to prioritise voice traffic. If a provider just sends you a handset in the mail and says "good luck", keep looking.
Not sure how many lines or features your business actually needs? The Phone System Sizing Wizard takes 2 minutes and gives you a clear recommendation.
Open the Sizing WizardHow to Switch Without Losing Your Numbers
This is the most common fear holding businesses back from switching: "What if I lose my number?" The good news is that number porting is well-established in Australia and your phone numbers are yours, not your provider's. Here is how it works.
Step 1: Confirm your current number is portable. Almost all standard Australian geographic numbers (02, 03, 07, 08 prefixes) are portable. 1300 and 1800 numbers can also be ported but the process is different. Confirm with both your current provider and your intended new provider before starting.
Step 2: Don't cancel your existing service. This is the most important instruction and the most commonly ignored one. You must keep your existing Telstra service active until the port is complete. Cancelling early -- even if you've arranged the port -- can result in the number being released and lost permanently.
Step 3: Start the port with your new provider. Your new cloud phone provider will initiate the porting request on your behalf. You'll need to provide your account details from your current provider (account number, address, and the number to be ported). The new provider submits the port request to the carriers. Typical timeframe: 5-10 business days for a standard geographic number. 1300/1800 numbers can take longer.
Step 4: Maintain business continuity during the port. Your existing service continues to work during the porting process. Calls will only redirect to your new service when the port completes. Coordinate with your new provider to ensure your new system is fully configured and tested before the cutover happens.
Step 5: Cancel your old service. Only once the port is confirmed complete and calls are arriving correctly on your new system should you contact Telstra to cancel the old service. For more detail, see: How to Migrate from a Landline to VoIP in Australia.
What Does a Modern Cloud Phone System Actually Cost?
Cloud phone pricing for Australian small businesses is typically structured per seat (per user) per month, with a separate call plan or included call allowance. Prices are AUD including GST.
Entry-level plans for a single user or small office typically start at $20-$35 per seat per month. This usually includes local and national calls, a direct inward dialling (DID) number, voicemail, and access to the cloud PBX features.
Mid-range plans that include unlimited local and national calls, plus mobile calls, are typically $35-$60 per seat per month.
Hardware is separate from the service plan. A good-quality entry-level SIP desk phone costs $90-$180 AUD (Yealink T31P or equivalent). Most providers will assist with configuration at no extra cost. If staff are happy to use their mobile or computer for calls (via a softphone app), hardware cost drops to zero.
The real comparison. A 5-seat business paying $200/month to Telstra for basic phone service could move to a cloud phone system, get a substantially better feature set, and pay $175-$250/month -- similar or lower cost -- with month-to-month contracts and local AU support. The advantage isn't always price. It's what you get for the same money.
Use the VoIP Cost Calculator to model the numbers for your specific team size and call volume.
What Most Businesses Get Wrong
Mistake 1: Cancelling your old service before the port is done. This is the most expensive mistake in business phone switching. If you cancel your Telstra service and the number hasn't ported yet, you can lose the number permanently. Always keep the old service running until the new one is confirmed live.
Mistake 2: Starting with the handset instead of the service. A common pattern is to buy a SIP desk phone (Yealink, Grandstream) and then try to figure out what service to connect it to. This is backwards. Choose your cloud phone provider first, confirm compatibility, then choose handsets based on the provider's recommendation. The provider will often have preferred hardware they can pre-configure for you.
Mistake 3: Choosing based on the lowest headline price without reading the fine print. Some providers advertise low per-seat prices and then add charges for features (call recording, ring groups, IVR, additional DIDs) that more established providers include as standard. Get a full itemised quote for exactly the features you need before committing. Ask specifically: what isn't included?
Mistake 4: Assuming the switch is technically complex. For a small business, switching to a cloud phone system is not a major IT project. It's closer to setting up a new email service. A good provider will handle the porting, pre-configure the hardware, and walk you through setup in a single appointment. You don't need an IT manager or an MSP to manage a 5-seat cloud phone system.
Your Next Steps
If you're considering moving away from Telstra for your business phone, here's a simple checklist to work through before you make any decisions.
- Write down exactly what you currently pay. Pull your last 3 months of Telstra bills. What is the total monthly spend? What does each line item cover?
- List what you actually use. Do you actually use conference calling? International calls? The specific feature you're paying extra for? Separate the used features from the ones you're paying for but have never touched.
- Check how many simultaneous calls you handle. If two staff can be on the phone at the same time, you need at least 2 lines/channels. Use the Phone System Sizing Wizard to work this out properly.
- Confirm your internet connection can support VOIP. You need a stable NBN connection with at least 1Mbps upload per simultaneous call, low jitter, and low packet loss. Use the VoIP Bandwidth Calculator to assess your connection.
- Find your current account number and any contract end date. You'll need the account number for porting. Know when any lock-in period ends.
- Get a recommendation. Talk to a specialist who can match your actual call patterns and team size to the right plan. This is faster than trying to evaluate every provider yourself.
Get a tailored recommendation for your business. Tell us about your team and call patterns and we'll match you to the right phone system -- no lock-in, AU-based support.
Get a RecommendationCan I keep my Telstra phone number if I switch providers?
Yes. Number porting is your legal right under ACMA regulations. Your geographic number (02, 03, 07, 08 prefix) can be transferred to a new provider. The critical rule: keep your Telstra service active until the port is confirmed complete. Do not cancel first. Porting typically takes 5-10 business days for a standard geographic number. 1300 and 1800 numbers follow a different process and can take longer. See our full guide on number porting in Australia.
Do I need an NBN connection to use a cloud phone system?
You need a broadband internet connection -- which for most Australian businesses means NBN. The connection doesn't need to be fast, but it does need to be stable with low jitter and packet loss. As a rough guide, each simultaneous phone call requires approximately 100Kbps of upload bandwidth. A standard NBN 50 connection (typical for small offices) can comfortably support 5-10 simultaneous calls, well above what most small businesses need. The bigger concern is jitter and packet loss, not raw speed. See our guide on VoIP call quality on NBN for more detail.
How long does it take to switch from Telstra to a cloud phone system?
The actual setup of a cloud phone system can happen in a single day. The limiting factor is number porting, which takes 5-10 business days for standard numbers. From decision to fully live on the new system, most small businesses complete the switch in 2-3 weeks. During the porting period, your existing Telstra service continues to work normally -- there is no gap in service for incoming callers.
Do I need new desk phones, or can staff use their mobiles?
Both options work with a modern cloud phone system. Most providers offer a mobile app (softphone) that lets staff make and receive calls on their mobile under the business number -- no desk phone required. This is popular for businesses with staff who move around, work from home, or don't sit at a desk all day. Desk phones are still preferred for reception roles or high-call-volume positions where a physical handset is more practical. You can mix both -- some staff on desk phones, others on the mobile app -- on the same system.
What happens to my phone if the internet goes down?
This is a real and important question. Cloud phone systems depend on your internet connection. If the NBN goes down, calls will not connect to desk phones or desktop softphones. Most providers handle this through call forwarding: you can configure the system to automatically forward calls to a mobile number if the VOIP connection drops. This means customers still reach someone -- just on your mobile instead of your office phone. Some providers also offer a 4G SIM backup option for business-grade internet connections. See our guide on the PSTN shutdown and what it means for business continuity.
Is a cloud phone system reliable enough for a business that depends on incoming calls?
Yes, for the vast majority of Australian small businesses. Modern cloud phone platforms run on carrier-grade infrastructure with high availability guarantees (often 99.9%+ uptime SLAs). The main reliability variable is your internet connection, not the provider's platform. If your NBN connection is stable, your phone system will be stable. If your internet has reliability issues, fix the internet first -- or consider a business-grade connection with a backup option. The cloud phone platform itself is typically more reliable than an on-premise PBX, which can fail if the hardware in your office fails.
What is Telstra Adaptive Collaboration and do I need it?
Adaptive Collaboration is Telstra's enterprise-grade unified communications product, based on Microsoft Teams. It integrates calling capability directly into Microsoft Teams, so staff can make and receive business calls within the Teams interface. It's a legitimate product for larger organisations with existing Microsoft 365 deployments and IT infrastructure teams to manage it. For a small business with 2-10 staff, it is almost certainly overkill. The setup complexity, licensing cost, and IT management overhead are not justified by the use case. A purpose-built cloud phone system from a specialist provider will be simpler, cheaper, and faster to deploy for most small businesses.