Microsoft Teams add-on licenses allow organisations to extend the capabilities of Microsoft Teams beyond the core collaboration features included with most Microsoft 365 subscriptions.
While standard Teams licensing provides messaging, meetings, and collaboration, add-on licenses enable additional functionality such as:
- Phone system capabilities
- PSTN calling
- Meeting dial-in numbers
- Advanced meeting experiences
- Meeting room devices
- Shared workplace devices
In simple terms:
Teams add-on licenses allow you to enable additional communication features for users who need them.
Not every user in an organisation requires every feature, which is why Microsoft provides them as optional add-ons.
Why This Matters to Administrators
Most organisations start using Microsoft Teams primarily for:
- chat
- video meetings
- collaboration
- file sharing
However, as Teams becomes the central communication platform, organisations often want to expand its capabilities.
Common examples include:
- replacing legacy phone systems
- allowing users to dial into meetings via telephone
- enabling meeting room devices
- supporting hot-desk and shared devices
- improving meeting security and AI features
These capabilities are enabled through Teams add-on licenses.
Understanding which licenses are required helps organisations avoid both over-licensing and missing features.
Overview of Microsoft Teams Add-On Licenses
The most common Teams add-on licenses include:
| License | What It Adds |
|---|---|
| Microsoft Teams Premium | Advanced meeting features, enhanced security, AI-powered meetings, and administrative tools |
| Audio Conferencing | Allows users to dial into Teams meetings via a phone |
| Teams Phone Standard | Cloud PBX capabilities for calling |
| Microsoft Teams Calling Plans | PSTN connectivity with Microsoft as the carrier |
| Teams Phone with Calling Plan bundle | Combines Teams Phone and Microsoft Calling Plan |
| Communication Credits | Pay-as-you-go minutes for phone calls |
| Microsoft Teams Rooms | Enables Teams-powered meeting room devices |
| Microsoft Teams Shared Devices | Licensing for shared workplace devices like common area phones |
Each add-on provides additional functionality depending on the organisation’s communication requirements.
Microsoft Teams Premium
Microsoft Teams Premium enhances the meeting experience with advanced features.
Capabilities include:
- Intelligent meeting recap
- AI-generated meeting notes and tasks
- Advanced webinar and meeting controls
- Meeting protection and watermarking
- Advanced meeting analytics
- Custom meeting templates
Teams Premium is typically deployed to users who host large meetings, webinars, or require enhanced compliance controls.
Audio Conferencing
Audio Conferencing allows users to join Teams meetings using a telephone instead of the Teams app.
This feature is also called PSTN conferencing.
Typical use cases include:
- participants without internet access
- external attendees joining from mobile phones
- conference call style meetings
Important points:
- Audio Conferencing does not require Teams Phone
- It is included with Microsoft 365 E5
- Users on E1 or E3 require it as an add-on
Audio Conferencing includes:
- toll dial-in numbers
- outbound dial-out capability
- operator connect conferencing
- shared outbound calling minutes
Outbound calling minutes are pooled across the tenant.
Microsoft Teams Phone
Teams Phone transforms Microsoft Teams into a cloud phone system.
It provides PBX functionality similar to traditional business phone systems.
Capabilities include:
- voicemail
- call transfer
- call forwarding
- call queues
- auto attendants
- caller ID management
Teams Phone replaces on-premise PBX systems with a cloud-based phone system inside Microsoft Teams.
However, to call external phone numbers, organisations must connect Teams to the Public Switched Telephone Network (PSTN).
PSTN Connectivity Options
External calling requires a connection to the PSTN.
Microsoft provides multiple options:
Microsoft Calling Plans
Microsoft acts as the telecom provider.
Organisations can choose:
- Domestic Calling Plans
- International Calling Plans
- Pay-As-You-Go Calling Plans
Operator Connect
Allows existing telecom providers to connect their network directly to Microsoft Teams.
This option is often used when organisations want to keep their existing carrier.
Direct Routing
Allows organisations to connect their own telecom infrastructure using a Session Border Controller (SBC).
This option is common for large enterprises or complex telephony environments.
Communication Credits
Communication Credits provide a prepaid pool of minutes used when calling beyond standard plan limits.
They are commonly used for:
- toll-free numbers
- outbound dial-out from meetings
- Auto Attendant calls
- Call Queue calls
They act as a backup when included calling minutes are exhausted.
Microsoft Teams Rooms
Microsoft Teams Rooms licenses enable Teams-powered conference room devices.
These devices provide:
- video conferencing
- meeting room scheduling
- wireless content sharing
- one-touch meeting join
There are two licensing tiers:
Teams Rooms Basic
- free for up to 25 rooms
- core meeting functionality
Teams Rooms Pro
- advanced management
- security features
- enterprise meeting room capabilities
Microsoft Teams Shared Devices
Shared Devices licensing is designed for devices used by multiple people.
Examples include:
- common area phones
- hot-desk displays
- Teams panels outside meeting rooms
Instead of assigning licenses to users, these licenses apply directly to the shared device.
This supports hybrid workplaces where employees share physical devices.
Important Licensing Changes (2024 Update)
Microsoft introduced a major licensing change affecting new enterprise customers.
Starting April 1, 2024, new enterprise customers must purchase Teams separately from Microsoft 365 enterprise suites.
Instead of a single bundled license, organisations must purchase:
- Microsoft 365 or Office 365 suite without Teams
- a standalone Microsoft Teams license
Existing customers who previously purchased bundled licensing can continue renewing those subscriptions.
This change was introduced earlier in the European Economic Area (EEA) in October 2023.
Managing Teams Add-On Licenses
Administrators manage Teams add-on licenses in the Microsoft 365 admin center.
The process involves:
- Purchasing the add-on license
- Assigning it to users or devices
- Managing access when roles change
Licenses can be removed by:
- unassigning the license from the user
- removing the product license from the tenant
Proper license management ensures users receive the correct Teams capabilities without unnecessary cost.
What This Means in a Real Tenant
In most organisations:
- basic users only need standard Teams licensing
- meeting hosts may need Audio Conferencing
- executives or webinar hosts may require Teams Premium
- organisations replacing PBX systems deploy Teams Phone
- conference rooms require Teams Rooms licenses
Teams add-ons allow administrators to scale functionality only where needed.
Quick Summary
Microsoft Teams add-on licenses extend the functionality of Microsoft Teams.
They enable:
- phone system capabilities
- PSTN calling
- dial-in meeting access
- advanced meetings
- conference room devices
- shared workplace devices
Instead of providing every feature to every user, organisations can assign add-ons only to users or devices that require them.
This flexible licensing model allows Teams to function as everything from a simple collaboration platform to a full enterprise communication system.
