What Your MSP Isn't Telling You About Your Phone System

This guide covers five potential issues to check when an MSP advises an SMB on phone systems, including licensing, channel incentives, number-account control, calling allowances, and architecture costs. It is written for business owners who rely on an MSP for IT advice and want to know whether the phone system recommendation they received was the right one for their business, or the right one for their provider's margin. By the end, you will have a checklist of direct questions to ask your MSP, and a clear picture of when their recommendation is sound and when a cheaper, simpler alternative exists.

What an MSP Does and Why SMBs Use Them

A managed service provider (MSP) looks after IT infrastructure for businesses that don't have in-house IT staff. For most SMBs under 20 staff, the MSP relationship covers everything: Microsoft 365 licences, laptops, servers or cloud storage, network switches, Wi-Fi, and often phones.

This is a genuinely useful arrangement. Most small businesses can't justify a full-time IT employee, and an MSP gives them access to professional support at a predictable monthly cost. For many SMB owners, the MSP is the only IT advice they ever receive.

That is also exactly why understanding the MSP revenue model matters. If your sole IT adviser has a financial stake in the outcome of their recommendation, that's not a reason to distrust them. It is a reason to ask clearer questions.

How MSPs Earn Revenue (The Part Most Clients Don't Know)

MSPs typically earn revenue from three sources:

• Per-device management fees - a flat monthly fee per endpoint (laptop, desktop, server) under management
• Microsoft 365 licensing margin - Microsoft CSP pricing, discounts, and incentives vary by partner type, distributor, product, and program; ask the MSP to disclose the margin or incentive applicable to the quoted licences. More users means more margin, month after month.
• Vendor rebates and add-on product margins - hardware, software, and additional cloud services sold through the MSP channel often carry margins the client never sees as a line item

When Microsoft released Teams Phone as a standalone add-on (Teams Phone Standard), MSPs gained an additional recurring revenue line. Teams Phone Standard currently costs AU$15 per user per month on an annual subscription, excluding GST, with PSTN connectivity added through a Calling Plan, Operator Connect, or Direct Routing. An MSP who resells these licences earns margin on both.

Specialist phone providers use several channel models: some bill businesses directly, while others pay MSPs referral commissions or offer reseller and wholesale margins. That is not a conspiracy. It is just how the channel economics work, and it shapes recommendations in ways that are worth understanding.

5 Things Your MSP May Not Be Telling You

1. Teams Phone Is Not Included in Your M365 Subscription

Microsoft currently sells Business Standard and Business Premium in Australia both with and without Teams. The versions that include Teams provide chat, meetings, and collaboration, but not PSTN calling. They do not give you the ability to make and receive phone calls on a real phone number.

To turn Teams into an actual phone system, you need:

• Teams Phone Standard add-on - AU$15 per user per month excluding GST, on an annual commitment
• A calling architecture - Microsoft states its own Calling Plans are not available to purchase in Australia, so this means Operator Connect through a certified Australian carrier, or Direct Routing (which requires a Session Border Controller), or Operator Connect (available through selected Australian carriers)

At current Microsoft list pricing, 10 users cost AU$150 per month excluding GST for Teams Phone Standard alone, AU$195 per month excluding GST for Teams Phone with pay-as-you-go calling before usage, or AU$329 per month excluding GST for the domestic-calling bundle, on annual subscriptions and in addition to an eligible Teams licence.

Many businesses only discover this when they ask their MSP the question directly. Until then, it often isn't mentioned.

2. Direct Routing Is Complex and Your MSP Earns on the SBC

Direct Routing is the technically superior way to connect Teams Phone to the phone network. Direct Routing connects Teams to third-party PSTN services through a supported SBC and can support existing carrier contracts or additional telephony integrations; pricing and operational control depend on the chosen carrier and deployment model.

Direct Routing requires supported SBC infrastructure, which may be customer-deployed or provider-managed; costs and billing models vary by vendor, capacity, licensing, support, and whether pricing is per user or per channel. An MSP who sources, configures, and manages the SBC earns on it. That's not dishonest, but it does mean the cost of Direct Routing is rarely presented as a single clear number.

Whether Direct Routing costs more than a standalone cloud phone system depends on Microsoft licensing, the SBC and carrier model, call usage, support, handsets, setup fees, and contract terms; compare itemised like-for-like quotes.

3. A Simpler, Cheaper Alternative Exists

A purpose-built Australian cloud phone system company delivers a complete business phone system as a single product: phone numbers, inbound and outbound calling, a cloud phone system (ring groups, auto-attendant, voicemail to email, after-hours routing), a mobile softphone app, and support for physical desk phones.

There is no M365 dependency, no SBC, no separate calling plan licence, and no need for an MSP to manage it. Setup and ongoing management vary by provider, number-porting requirements, handset provisioning, network readiness, integrations, sites, and call-flow complexity. A standalone cloud phone system may cost less for some SMBs, but the result depends on call usage, handsets, support, setup, Microsoft licensing, and the selected PSTN architecture.

Your MSP may not mention this option. It is not because they are hiding it. The MSP's financial position depends on the provider and channel arrangement: some direct services pay no MSP margin, while others offer referral commissions, wholesale pricing, or reseller revenue. Their job is to manage your IT environment, and a business phone company who handles everything themselves removes a service line from the MSP's scope.

If you want independent advice on which provider suits your business size and call volume, the Get a Recommendation tool on this site is a good starting point. You can also compare the full cost breakdown in the Teams Phone pricing guide and the cloud phone system pricing guide.

4. Your Phone Number Might Not Be in Your Business Name

If a phone-service account is created under an MSP's company name rather than the customer's, porting or moving the service can require the MSP's cooperation or an account transfer.

The practical consequence: if you ever change MSP, or if your relationship with your current MSP breaks down, porting your business phone number away from their account can be complicated. The gaining provider must obtain authorisation from the customer-the person issued the number or otherwise entitled to port it-or from a person authorised in writing by that customer, and must validate the relevant account details. If that's the MSP and they are uncooperative, the process becomes significantly slower and harder.

The fix is straightforward: confirm with your MSP, in writing, that every phone service account is held in your business's ABN and name. If it isn't, ask for it to be transferred. Most reputable MSPs will do this without objection. The ones who resist are telling you something important.

5. 'Unlimited Calls' Plans Have Caps

Plans marketed as unlimited may be subject to fair-use terms, but thresholds, included destinations, pooling rules, and remedies vary by provider and plan. Check the current Critical Information Summary, fair-use policy, and international-call inclusions before purchase.

Businesses most at risk: medical practices with appointment booking lines, real estate agencies, financial services, contact centres, and any business with a 1300 number that generates volume inbound calls. Whether a usage-based or bundled plan is cheaper depends on actual call minutes, destinations, pooling rules, inbound-number charges, overage terms, and any high-volume or contact-centre restrictions.

MSPs reselling Microsoft Calling Plans or phone system plans with a fair use cap don't always proactively explain the cap at signup. Ask the specific number before you commit, and run the maths against your actual call volume from the last three months. Your phone bill or call logs will have the data.

What to Ask Your MSP: A Direct Checklist

These are not hostile questions. They are the questions any informed business owner should be able to get a clear, prompt answer to. If your MSP can't answer them, or gives vague answers, that is useful information.

• Is the Teams Phone add-on included in our current M365 billing, or is it a separate line item? (If it's included, show me where it appears on the invoice.)
• Is our phone number account held in our business name and ABN? (If not, what would it take to transfer it?)
• What is the fair use cap on our calling plan, in minutes per user per month?
• Do you receive any margin, rebate, or referral fee on the phone services you have recommended?
• Have you assessed any dedicated Australian business phone companies for our business size and call volume? (If so, which ones, and why did you recommend against them?)

A good MSP will answer all of these without hesitation. The answers help you calibrate trust, not destroy it.

When MSPs Get It Right

This article is not an argument against MSPs or against Teams Phone. There are genuinely good reasons to have an MSP manage your phone system inside the Microsoft stack.

Teams Phone through an MSP is the right call when:

• Your team is 50 or more staff and lives inside Microsoft Teams for daily communication, collaboration, and meetings. Consolidating calling into Teams removes one app and one support relationship.
• You have a complex multi-site environment that requires consistent call routing across locations, and your MSP has the expertise to design and maintain it.
• Your workflows are deeply integrated with Microsoft 365, and you need native call data inside Dynamics, Teams, or other Microsoft tools that a third-party business phone company can't match.
• You have an existing enterprise agreement with Telstra or Optus that makes Operator Connect the logical path.

For these businesses, the additional complexity and cost of Teams Phone is justified, and an MSP managing the full Microsoft stack including calling is the sensible choice.

The business this article is written for is different: the 1-20 seat SMB that defaulted into Microsoft Teams calling because that is what their MSP manages, without anyone checking whether it was genuinely the best fit for their phone system needs.

For a full head-to-head comparison of Teams Phone versus a dedicated business phone company, see the Teams Phone vs cloud phone system comparison.

Australian Businesses: The NBN Reality Your MSP May Have Missed

In NBN fixed-line areas, legacy phone and internet services were progressively disconnected after the NBN became available. Copper and other legacy voice services still operate in some regional, remote, fixed-wireless, and satellite areas, so not every Australian business phone service runs over IP. That includes Teams Phone, cloud phone system, and the phone plugged into the green port on your ISP's modem. The question is not whether to use VOIP. The question is which VOIP architecture best fits your business.

NBN call quality varies by connection type. VoIP call quality depends on end-to-end latency, jitter, packet loss, available bandwidth, routing, and local-network configuration; connection type alone does not establish whether a service will be stable. Support scope and escalation paths vary by provider and contract; compare SLAs, diagnostic responsibilities, local support hours, and whether the provider also manages the internet connection.

1300 numbers deserve special mention. If your business uses a 1300 or 1800 number, confirm explicitly that your phone system supports porting it in and routing it correctly. Support for porting and routing a specific Australian 1300 or 1800 number should be confirmed with Microsoft or the selected Operator Connect or Direct Routing provider before deployment. Many Australian providers offer 1300/1800 services, but porting eligibility, routing, inbound charges, and plan inclusion vary; confirm them with the selected provider. See the best VOIP phone system guide for provider-specific details.

Common Mistakes: What Most Businesses Get Wrong

These are the three mistakes that result in businesses paying more than they should, or finding out too late that their phone setup has limitations they didn't know existed.

Assuming Teams does calling out of the box. The single most common misconception. Microsoft 365 includes Teams. Teams Phone is a separate product that costs extra. Businesses that haven't explicitly purchased Teams Phone Standard and a calling architecture don't have a phone system, they have a meeting and chat tool.

Not confirming who owns the phone account. Phone numbers are business assets. Losing access to a number you've printed on 10,000 brochures, your website, and your Google Business profile is a serious operational problem. Confirm account ownership in writing before your next contract renewal, not when a provider relationship breaks down.

Accepting a phone recommendation without asking about alternatives. If the only IT advice you receive comes from someone with a financial stake in the outcome, asking one additional question takes 30 seconds: "Have you looked at purpose-built business phone companies for a business our size?" The answer, and how confidently it's given, tells you a lot.

Your Next Steps

If you want to check whether your current phone setup is the right one for your business, work through this checklist.

• Get your current phone invoice. Find the specific line items for your phone service. Is Teams Phone Standard listed separately? What is the per-user cost? How does it compare to a standalone phone system plan?
• Confirm account ownership. Call or email your MSP and ask: "Is our phone number account held in [Your Business Name] ABN [Your ABN]?" Get the answer in writing.
• Check your fair use cap. Ask your MSP or check the plan documentation directly. If your business makes more than 1,000 minutes of calls per user per month, verify whether you have ever triggered overage charges.
• Get a second opinion on your phone system. A specialist business phone company can assess your current setup, call volume, and budget and give you an independent view in 15 minutes. There's no obligation. Use the Get a Recommendation tool on this site to start the process.
• Compare the numbers. Use the Teams Phone pricing guide and the cloud phone system pricing guide to build a side-by-side cost comparison for your seat count before your next contract renewal.

What Should a Business Phone System Actually Cost?

Published Australian cloud-phone prices vary by provider, billing model, and inclusions; compare whether GST, calls, handsets, setup, support, minimum terms, and additional numbers are included. An MSP charging significantly above this should be able to articulate exactly what the premium covers: management overhead, SLA response times, security monitoring. If they cannot, you are likely paying a margin on a commodity service. Most AU cloud phone providers publish their per-user pricing publicly. A well-configured cloud phone system should not cost more than $50 per user per month for standard SMB features. Anything above that warrants a line-by-line breakdown from your provider.

Every MSP arrangement is different. Some businesses may find a lower-cost direct cloud-provider option after comparing like-for-like pricing and support inclusions. Tell us your monthly phone bill and how many extensions you have. We'll tell you whether you're paying the right amount. We reply personally. Not a bot, not a form letter.