If your business phone system is getting old, or you have just been told your old lines are going away, you have probably run into the choice between Microsoft Teams Phone and a traditional PBX. Here is the plain-English comparison, and how to work out which one actually suits your business.
First, the bit of Australian context you can’t ignore
Before we compare the two, there is a change that has already made the decision for a lot of businesses. Australia’s old copper phone network and ISDN lines (the technology most traditional office phone systems ran on) have been retired as part of the NBN rollout. That process is essentially finished.
In practice, that means a traditional on-site phone system connected to those old lines is no longer a long-term option. So for most businesses the real question is not “should I keep my PBX forever,” it is “what do I replace it with.” Teams Phone is one of the strongest answers, but not the only one, so let us look at both properly.
What is a traditional PBX?
PBX stands for Private Branch Exchange. In plain terms, it is a phone system that lives in your business: a piece of hardware (often a box in a comms cupboard) that connects your desk handsets to each other and to the outside phone network.
For decades this was simply how office phones worked. You bought the hardware, an installer wired up the handsets, and it connected to the phone network through business lines. There is also a “hosted PBX” version, where the same style of system is run from a provider’s data centre instead of your cupboard, which removes the on-site hardware but keeps the traditional handset-and-extension way of working.
What is Teams Phone?
Teams Phone is Microsoft’s calling capability built directly into Microsoft Teams, the app your team may already use for chat and video meetings. Instead of a separate phone system, calling becomes another feature of the software you are already in.
To use it for normal business calls, you need two things: a Teams Phone licence (included in some Microsoft 365 plans, or added on), and a way to connect Teams to the public phone network so you can call and be called on ordinary phone numbers. That connection can come from Microsoft directly or through a phone provider who sets it up for you. Once it is running, your team can make and take calls from a laptop, the Teams mobile app, or a compatible desk handset, all on your business number.
If Microsoft 365 is already the centre of how your business works, this is part of what we help clients get right in our Microsoft 365 optimisation and business phones work.
How they compare on the things that matter
Cost
A traditional PBX is a large upfront purchase: the hardware, the handsets and the installation, plus ongoing maintenance. Teams Phone flips that to a predictable monthly cost per user, with little or no hardware to buy. For a small or growing business, moving from a big one-off bill to a steady per-person cost usually makes budgeting far easier.
Working from anywhere
This is where the gap is widest. Teams Phone travels with your people: the same business number rings on their laptop and mobile whether they are at their desk, at home or on the road. A traditional PBX is tied to the office and its handsets, which is a poor fit for the hybrid way most teams now work.
Growing and changing
Adding a new starter to Teams Phone is a few clicks in an admin screen. Growing a traditional PBX can mean hardware limits, new cabling and an engineer visit. If your headcount moves up and down, or you open a second location, cloud-based calling is far less painful.
Maintenance and updates
With Teams Phone, Microsoft runs the underlying system and keeps it current, so there is no ageing box for you to worry about. With an on-site PBX, keeping the hardware maintained, patched and eventually replaced is your responsibility (or your provider’s).
Reliability
Here is the honest trade-off. Teams Phone depends on your internet connection, so good, business-grade connectivity and a sensible backup (such as failover to a mobile network) matter. A traditional on-site system could keep working on its own lines, but it is also a single piece of hardware that can fail and take your phones down with it. Neither is magic; the answer is to design the connectivity properly, which is exactly why we bundle internet and connectivity with voice.
One app, or two systems
Because Teams Phone lives inside Teams, calling, chat and meetings all sit in one place. You can move from a message to a call to a shared screen without switching tools. A traditional PBX is a separate system that does not join up with the rest of your software. If your team already lives in Microsoft Teams, that single-app experience is a genuine day-to-day time saver.
So which one suits your business?
Teams Phone is usually the natural fit if you are already on Microsoft 365, you have a hybrid or remote team, you want one predictable monthly cost, or your headcount changes often. For most professional-services businesses (accounting, legal, allied health and the like), it ticks every box.
A hosted phone system or specialist VoIP setup may suit better if you have heavy call-centre or contact-centre needs, very specific hardware to integrate, or you simply are not a Microsoft 365 business. These are still cloud systems, just built around calling rather than around Teams.
The one thing that is clear is that staying on an old on-site PBX tied to the retired copper and ISDN lines is not a path forward in Australia any more. If that is where you are, a move of some kind is coming, so it is worth choosing the destination deliberately rather than being forced into a rushed swap.
Getting the move right
Whichever way you go, the details are what make it smooth: porting your existing numbers so nothing changes for your customers, setting up call flows, menus and voicemail the way your business actually runs, making sure your internet can carry the calls with a backup in place, and giving your team a quick hand to get comfortable. Done well, the change is invisible to the outside world and your phones simply keep ringing.
The advantage of having one team look after your voice and your IT together is that these pieces are planned as one, instead of pointing fingers between a phone company and an IT company when something needs sorting.
If your phone system is due for a decision, we are happy to talk it through in plain English and recommend the right fit, no jargon and no pressure. Take a look at our business phones and voice service, or get in touch for a quick chat.
Adam leads the Itopia team in Brisbane, helping professional-services firms get secure, productive and confident with their technology, in plain English.