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

This guide covers five things most managed service providers don't volunteer when advising SMB clients on phone systems, based on how MSP revenue models and Microsoft licensing incentives actually work. 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 - MSPs who resell Microsoft 365 receive a margin, typically 10-15% of the monthly licence cost. 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. The Teams Phone Standard add-on costs around $8 per user per month, plus a calling architecture cost on top of that. An MSP who resells these licences earns margin on both.

A specialist VOIP provider, by contrast, charges the business directly at a flat per-seat price. The MSP earns nothing from that arrangement. 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 365 Business Standard and Business Premium give you access to the Teams app for chat, meetings, and file collaboration. 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 - approximately $8 per user per month, per user
• A calling architecture - either a Microsoft Calling Plan (approximately $15 per user per month for domestic calls in Australia), or Direct Routing (which requires a Session Border Controller), or Operator Connect (available through selected Australian carriers)

That means a 10-person business asking "can we just use Teams for phones?" is looking at $230 or more per month in add-on licensing before a single call is made, on top of their existing M365 subscription.

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. Instead of paying Microsoft's Calling Plan rates, you connect Teams to a third-party SIP trunk through a Session Border Controller (SBC), which typically gives you cheaper call rates and more control.

The catch: an SBC is a piece of infrastructure that either costs money to buy (hardware SBCs from vendors like Audiocodes or Ribbon typically run $500-$3,000+) or money to license as a managed service (usually $5-$15 per user per month from a Direct Routing provider). 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.

Add it together: M365 licence + Teams Phone Standard + SBC service + SIP trunk costs, and the per-seat total for a 10-person business on Direct Routing frequently exceeds what a purpose-built Australian hosted VOIP provider charges for a complete phone system with no extra layers.

3. A Simpler, Cheaper Alternative Exists

A purpose-built Australian hosted VOIP provider delivers a complete business phone system as a single product: phone numbers, inbound and outbound calling, a hosted PBX (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 is typically handled by the provider's support team in a single session. Ongoing management is minimal. For most Australian SMBs under 20 staff, the all-in per-seat cost is lower than Teams Phone on any architecture.

Your MSP may not mention this option. It is not because they are hiding it. It is because they have nothing to sell in that transaction. Their job is to manage your IT environment, and a VOIP provider 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 hosted PBX pricing guide.

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

When an MSP sets up a phone service on your behalf, the account is sometimes created under the MSP's company name rather than yours. This happens with Telstra Business accounts, Microsoft Calling Plan accounts, and occasionally with VOIP providers where the MSP is the reseller.

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. In Australian porting rules, the person authorised to release a number is the account holder. 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 calls" almost always include a fair use policy. In practice, this means a cap of roughly 1,000 to 3,000 minutes per user per month for Australian and standard international calls. Calls beyond the cap are charged at a per-minute rate, which can add up quickly for businesses with high call volumes.

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. For these businesses, a usage-based calling plan is usually cheaper than an "unlimited" plan with overage charges.

MSPs reselling Microsoft Calling Plans or VOIP 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 VOIP providers 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 VOIP provider 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 VOIP provider, see the Teams Phone vs hosted VOIP comparison.

Australian Businesses: The NBN Reality Your MSP May Have Missed

Since the PSTN copper network was switched off in 2025, every business phone service in Australia now runs over an IP network. That includes Teams Phone, hosted VOIP, 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. FTTP and HFC connections are generally stable enough for business calling with correct QoS settings on the router. FTTN and FTTC connections can introduce jitter and packet loss at peak congestion times, which affects call quality regardless of which phone platform you use. A specialist VOIP provider will diagnose and work around NBN-related quality issues. Microsoft Calling Plans are a global infrastructure product and offer less local support for Australia-specific NBN issues.

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. Microsoft's Australian Calling Plans have had documented limitations with 1300 number support. A dedicated Australian VOIP provider handles 1300 numbers as a standard product. 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. Dozens of Australian SMBs are in this situation right now, not knowing why their "Teams phone" doesn't work for inbound calls from outside the organisation.

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 VOIP providers 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 VOIP 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 VOIP provider 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 hosted PBX pricing guide to build a side-by-side cost comparison for your seat count before your next contract renewal.