Microsoft Teams Phone has surpassed 26 million PSTN users, up 30% from the 20 million reported in April 2024. The surge cements Microsoft’s position as a major force in enterprise voice, establishing Teams Phone as one of the largest cloud PBX platforms globally.
The gain of six million users in eight months signals strong momentum in a market still transitioning from legacy systems to cloud-native communications.
Yet, beneath the growth headlines lies a more complex narrative of uneven adoption, evolving business models, and the long game of redefining enterprise telephony.
The Penetration Paradox
Despite impressive figures, Teams Phone’s reach remains limited, with penetration across Microsoft’s 350 million-plus Teams users being only around 6%, according to Patrick Wilson, Director of Research at Cavell. That raises a crucial question: why is adoption still lagging?
Wilson highlights several structural dynamics: many Teams users are collaboration-first employees with minimal need for external calling; pricing and licensing models can blunt the business case for enterprise-wide rollout; and mature markets are seeing deployment slow as implementations become more complex. Providers are now adding layers such as analytics, compliance, and contact center integrations to protect margins once secured by legacy voice services.
Still, Wilson notes “huge whitespace” ahead. As he puts it, success in 2026 will hinge on showing clear ROI “beyond basic dial tone.”
Building the Platform
The growth from 20 to 26 million users reflects more than market momentum, it’s the outcome of 18 months of focused platform expansion. Since mid-2024, Microsoft has been filling in the technical and operational gaps that once limited Teams Phone’s enterprise appeal.
A major milestone came in September 2025 with the general availability of Teams Phone extensibility for Dynamics 365 Contact Center. This integration converges telephony, contact center, and collaboration operations, enabling organizations to configure Calling Plans, Direct Routing, or Operator Connect within a unified cloud environment.
Microsoft has also strengthened collaboration with global telecom carriers, advancing fixed–mobile convergence. UK operators like Vodafone and Virgin Media O2 Business now offer Teams Phone Mobile, linking a user’s mobile number to their Teams identity for synchronized calls, presence, history, and voicemail across devices. This integration transforms carriers from voice resellers into UCaaS partners, giving them a differentiated story against traditional mobile bundles.
In parallel, Microsoft has continued to simplify telephony management at scale through the Teams Admin Center. These tools bring previously telecom-only tasks, like DID assignment and routing, under the same administrative control plane as meetings and messaging, enabling larger enterprises to deploy Teams Phone efficiently and with confidence.
What Comes Next
Microsoft Teams Phone is evolving from a UCaaS add-on into a credible enterprise-grade cloud PBX platform capable of supporting complex, multi-site environments. The 26 million user milestone demonstrates both adoption and maturity.
But 2026 will test conversion more than growth. With only 6% penetration, the addressable market remains enormous, but so do customer expectations. Enterprises will demand integrated analytics, AI-driven automation, deeper contact center linkage, and commercial models that deliver measurable ROI compared to entrenched telephony systems.
For Microsoft and its partners, the challenge now is less about scale and more about proving that Teams Phone can be the backbone of enterprise voice.
