Choosing a Business Phone System in 2026

Q: What should an Australian business check before migrating to a new phone system?

Before migrating, Australian businesses should audit their current setup: list every phone number including 1300 and 1800 numbers and confirm each can be ported; identify equipment connected to phone lines beyond handsets such as alarms, EFTPOS terminals, and lift phones; check internet connection quality and bandwidth; map current call flows including after-hours routing; and confirm the provider's number porting timeline, which typically runs five to ten business days for Australian numbers.

The way Australian businesses make and receive calls has changed more in the past three years than in the previous thirty. Telstra’s ISDN network is fully decommissioned. Legacy SIP and inbound number services are being wound down through 2026. The NBN reaches the overwhelming majority of commercial premises. And staff now split their time between offices, homes, and job sites as a matter of course.

If your phone system hasn’t changed with any of this, you’re probably not running a broken system. You’re running an ageing one, and the gap between what it does and what a current system does is growing quickly. This guide walks through the main options available to Australian SMEs in 2026, what each one costs you in practice, and how to decide which direction to go.

What are the main types of business phone systems available in 2026?

Australian businesses choosing a phone system in 2026 have three practical options: a cloud-hosted PBX (Private Branch Exchange), an on-premise PBX, or a hybrid approach using SIP (Session Initiation Protocol) trunking to connect an existing system to the internet. For most businesses with between five and one hundred staff, a cloud-hosted PBX is the right starting point. The system runs on servers managed by a provider, not in your office. You pay a per-user monthly fee, connect staff via software apps or physical desk phones, and the provider handles maintenance, updates, and security.

On-premise PBX means buying and maintaining a physical telephone switch in your building. You own the hardware, your IT team manages it, and you carry the cost of every update and repair. In 2026, this model makes sense only for organisations with specific compliance or integration requirements that cloud providers cannot meet. The upfront capital expense and ongoing maintenance burden are hard to justify for most SMEs when cloud alternatives deliver more features at lower total cost.

SIP trunking is a middle path. It keeps an existing on-premise system in place but replaces physical phone lines with internet-based connections. This avoids the cost of replacing working hardware immediately, while still moving calls off the legacy copper network that no longer exists. It suits businesses mid-migration, or those running specialist equipment that isn’t yet ready to move fully to the cloud.

Why is now a critical time for Australian businesses to review their phone system?

Australian businesses that still rely on Telstra’s legacy voice infrastructure face hard deadlines in 2026. Telstra’s Call Termination Services, which underpinned many business SIP setups, stopped accepting new connections in September 2025 and all existing services cease on 30 September 2026. Telstra’s Calling for Office 365 (TCO365) product is being withdrawn on 30 November 2026. These are not soft transitions. Businesses still on these services will lose phone capability when the cutoff arrives if they haven’t migrated.

The broader infrastructure shift has been underway for years. Telstra’s ISDN network ceased selling new connections in 2018 and was fully decommissioned by mid-2022. The NBN rollout replaced the copper network that legacy phone systems depended on. Most Australian businesses replacing an ageing system today are moving to VoIP (Voice over Internet Protocol) by necessity as much as by choice. The question for most SMEs is not whether to move, but which cloud option to move to.

What does a cloud phone system actually cost an Australian SME?

A cloud-hosted PBX for an Australian SME typically costs between $25 and $55 per user per month, depending on the provider and the features included. That monthly fee usually covers call routing, auto-attendant (the menu callers hear when they dial in), voicemail to email, call recording, and the management portal. Hardware is optional. Staff can use a softphone app on their laptop or mobile, which means no handsets to buy. Businesses that want physical desk phones can add certified hardware from providers like Yealink at an additional cost, either purchased outright or bundled into a monthly plan.

The total cost comparison with a legacy system is rarely straightforward, because legacy costs are often spread across line rental, per-minute charges, maintenance contracts, and hardware depreciation. Looking at the combined figure over 36 months tends to favour cloud significantly, particularly when you include the cost of the IT time needed to maintain on-premise hardware. Cloud systems also remove the risk of a sudden, unplanned hardware repair bill.

How does Microsoft Teams Calling work as a phone system for Australian businesses?

Microsoft Teams Calling turns the Teams application your staff already use for chat and video meetings into a full business phone system, allowing them to make and receive calls to any Australian phone number directly from within Teams. For Australian SMEs already on Microsoft 365, this is often the most practical consolidation move available. It removes a separate communications application from the stack, simplifies vendor management, and keeps call data inside the Microsoft 365 environment your business already relies on.

The setup requires a Teams Phone licence added to your existing Microsoft 365 subscription, plus a connection to the Australian Public Switched Telephone Network (PSTN). Microsoft’s own Calling Plans are not natively available in Australia at practical pricing, so most Australian businesses connect Teams to the phone network through Direct Routing. Direct Routing uses a local Australian SIP trunk provider, who connects your Teams environment to the Australian phone network via a certified Session Border Controller. Your existing business numbers, including 1300 and 1800 numbers, can be ported to the new provider and used directly within Teams. TTA’s Microsoft Teams Calling service handles this setup for Australian businesses end-to-end, including number porting and call flow configuration.

Teams Calling suits businesses that are already comfortable in the Microsoft 365 environment and want to reduce the number of separate tools their team manages. It is less suited to businesses with specialist telephony requirements, such as complex multi-site call centre routing or hardware dependencies that sit outside the Microsoft ecosystem.

What is a dedicated cloud PBX and when does it make more sense than Teams Calling?

A dedicated cloud PBX is a standalone hosted phone system provided by a specialist telecommunications provider. It operates independently of Microsoft 365 and typically offers more granular call management features than Teams Calling out of the box, including advanced call queuing, wallboards, detailed call reporting, and deeper integration with third-party CRM (Customer Relationship Management) systems. For businesses that handle high call volumes, run reception-heavy operations, or need to manage complex call flows across multiple departments or locations, a dedicated cloud PBX gives more control over the telephony layer.

The choice between a dedicated cloud PBX and Teams Calling often comes down to where your staff spend most of their working time. If the team lives in Teams, extending it to handle calls reduces friction and training overhead. If the team’s primary work happens in a CRM or industry-specific software, and voice is a distinct workflow, a dedicated cloud PBX with direct integrations may suit better. Both are mature, well-supported options for Australian SMEs in 2026. The right choice depends on your existing tools and how your team actually works, not on which technology is newer.

What features should an Australian SME prioritise when comparing phone systems?

Australian SMEs comparing phone systems in 2026 should focus on five practical capabilities rather than marketing feature lists. First, call routing flexibility: the ability to send calls to the right person or team based on time of day, staff availability, and call type, without needing a technician to make changes. Second, mobile and remote access: staff should be able to make and receive business calls on their mobile or laptop without giving out personal numbers, with the same business number regardless of where they are working. Third, number portability: your existing business numbers, including any 1300 or 1800 numbers, should transfer cleanly to the new system without a gap in service. Fourth, local support: phone systems are business-critical infrastructure, and the ability to reach a knowledgeable Australian support team quickly matters when something goes wrong. Fifth, integration with your existing tools: whether that is Microsoft 365, a CRM, or an industry platform, the phone system should fit into your workflow, not create a parallel one.

Features like AI call transcription, sentiment analysis, and automated call summaries are increasingly included in cloud phone platforms at no extra cost. These are genuinely useful for teams that review calls for quality or compliance, but they are secondary considerations. Get the fundamentals right first.

What should an Australian business check before migrating to a new phone system?

Before committing to a new phone system, Australian businesses should work through a short audit of their current setup. The goal is to avoid surprises during migration and ensure the new system covers everything the old one did, including things that are easy to forget.

List every phone number your business uses, including DDIs (Direct Dial In numbers), 1300 or 1800 numbers, and fax lines, and confirm each one can be ported to the new provider.
Identify any equipment connected to your phone lines beyond handsets, including alarm systems, EFTPOS terminals, lift phones, and fax machines, as these may need separate handling during a VoIP migration.
Check your internet connection quality and bandwidth, because cloud phone systems depend on a stable, low-latency connection, and call quality degrades on a congested or unreliable link.
Map your current call flows, including after-hours routing, hold music, and transfer rules, so these can be replicated or improved in the new system before go-live.
Confirm the provider’s number porting timeframe, which typically runs five to ten business days for Australian numbers, and plan migration during a lower-risk period for your business.

A good provider will ask these questions before proposing a solution. If a provider quotes a system without asking about your current setup, call flows, and number inventory, that is a signal to ask more questions before committing.

How does internet connection quality affect cloud phone system performance?

Cloud phone systems route voice calls over your internet connection, which means connection quality directly affects call quality. The NBN has made reliable business broadband available to most commercial premises in Australia, but not all NBN connections are equal. A standard NBN connection shared across a whole office, with no Quality of Service (QoS) configuration, can produce choppy or delayed audio during peak usage if the connection is saturated by other traffic. A business-grade internet service with QoS settings that prioritise voice traffic resolves this. For businesses in areas with limited NBN options, 4G or 5G failover connections provide a backup path if the primary link drops.

The practical threshold for most cloud phone systems is around 100 kilobits per second of dedicated bandwidth per simultaneous call, which is a small demand on a modern NBN service. The more important variable is latency and jitter, not raw speed. A connection with consistent, low-latency performance will deliver better call quality than a faster connection with variable response times. Any reputable cloud phone provider will help you assess your connection before deployment.

What questions should you ask a phone system provider before signing up?

The right questions to ask a business phone system provider before committing are practical ones about support, contracts, and hidden costs. These questions help you compare options on an equivalent basis rather than on headline price alone.

What is your support model, and how do I reach a person when something goes wrong during business hours?
Are there lock-in contracts, and what are the exit terms if the system doesn’t meet our needs?
What is the total cost of ownership over 36 months, including per-user fees, call charges, hardware, and number porting?
How do you handle number porting, and what is the process and timeline for transferring our existing numbers?
Where is your infrastructure hosted, and what is your uptime Service Level Agreement (SLA)?
What happens to our calls if our internet connection goes down, and do you provide failover options?

Asking for a 36-month total cost of ownership figure forces the provider to surface costs that may not appear in monthly headline pricing, including call charges, add-on features, and hardware commitments.

How do we get started?

If your phone system is ageing, tied to legacy infrastructure, or simply no longer fits how your team works, we can help you work through the options. TTA supports Australian businesses with cloud phone systems, Microsoft Teams Calling, and IT consulting to make sure the right system is in place before any deadlines arrive. Get in touch with the TTA team to start a conversation about what makes sense for your business.