Location-Based Routing in India for Microsoft Teams: Why You Need It and How to Design It

What Is Toll Bypass and Why India Cares

In most countries, you can route a voice call from City A to City B entirely over the internet (VoIP) and then break out to the PSTN at City B. This is perfectly legal in most places.

In India, it is not. Here is why.

India's telecom industry generates significant revenue from long-distance call charges. When you make a call from Mumbai to Delhi, the Indian telecom carrier charges long-distance rates. If a company uses VoIP to carry that call from Mumbai to Delhi over the internet and only touches the PSTN at the Delhi end, the carrier loses the long-distance revenue. This practice is called toll bypass.

The Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) have explicitly prohibited toll bypass. The regulations require that PSTN calls must enter and exit the PSTN through the same local carrier network. You cannot use VoIP to circumvent the domestic toll charges.

Why LBR Is Mandatory for Teams in India

When you deploy Microsoft Teams Phone with Direct Routing in India, without LBR, the following scenario is possible:

A Teams user in Mumbai dials a landline number in Delhi

Teams routes the call through the internet to your SBC

Your SBC could be anywhere — Mumbai, Delhi, or even outside India

The call breaks out to the PSTN at the SBC location

If the SBC is in Delhi, the call went from Mumbai to Delhi over VoIP (the internet) and only touched the PSTN in Delhi. That is toll bypass. It is illegal.

Location-Based Routing forces Teams to route the call through the SBC that is local to the user. A Mumbai user's PSTN calls must go through the Mumbai SBC and break out to the PSTN in Mumbai. The carrier then handles the long-distance routing from Mumbai to Delhi through its own network, collecting the appropriate toll charges.

How LBR Works Technically

Network Topology Configuration

LBR relies on Teams knowing where the user is at the time of the call. This is determined by the IP subnet the user's Teams client is connected to. You must configure:

1. Network Regions

Define your major geographic regions (e.g., West India, North India, South India, East India).

2. Network Sites

Define each office location as a network site and assign it to a region. Each site is linked to a specific PSTN gateway (SBC).

3. Network Subnets

Map the IP subnets at each office to the corresponding network site. This is how Teams identifies which site a user is at.

4. Trusted IP Addresses

Define the public IP addresses of your corporate network. Teams uses these to determine if a user is inside or outside the corporate network.

Example Configuration

Call Flow with LBR Enabled

User in Mumbai dials Delhi number:

Teams checks user's IP subnet → 10.10.1.0/24 → Mumbai-Office site

LBR enforces that the call must route through mumbai-sbc.contoso.com

Call goes to Mumbai SBC → Mumbai SIP trunk → Indian carrier handles Mumbai-to-Delhi routing

Toll bypass is prevented

User roaming in Delhi dials Delhi number:

Teams checks user's IP subnet → 10.10.2.0/24 → Delhi-Office site

User's phone number is assigned to Mumbai site

LBR evaluates: user location (Delhi) vs phone number site (Mumbai) — mismatch

Call is blocked or routed through Delhi SBC if configured to allow it

User outside corporate network (working from home, hotel, etc.):

Teams checks external IP against trusted IP list → not matched → unknown location

LBR policy blocks the call — user sees "Call not allowed due to your organization's settings"

The user must be on the corporate network (or VPN) to make PSTN calls

Designing Your Network for LBR

SBC Placement

You need an SBC at every location where users need to make PSTN calls, connected to a local SIP trunk from a licensed Indian carrier.

For a typical multi-city deployment in India:

Each SBC must be paired with Microsoft Teams Direct Routing and assigned to the correct network site.

VPN Considerations

If users work from home and connect via VPN:

Ensure the VPN assigns an IP address from a subnet that is mapped to a network site

The subnet must be configured in Teams network topology

Split-tunnel VPN must route Teams signaling through the VPN tunnel (not direct to internet) for LBR to detect the correct location

Media Handling with LBR

Media Bypass with LBR:

Media bypass allows the voice media to flow directly between the Teams client and the SBC, bypassing the Microsoft cloud media processors. This reduces latency and improves call quality.

However, with LBR enabled, media bypass has specific requirements:

Media bypass is only allowed when the user is at the same site as the SBC

If the user is at a different site, media must flow through the Microsoft media processor

The SBC must be configured to handle both direct media (bypass) and relayed media (non-bypass)

Recommended approach: Enable media bypass for LBR sites but configure proper fallback. This keeps domestic calls low-latency while ensuring compliance.

Operator Connect for India

Microsoft has also introduced Operator Connect for India as an alternative to Direct Routing. In this model:

Licensed Indian operators (Tata Communications, Tata Tele Business Services, Airtel) provide PSTN connectivity directly through the Teams admin center

LBR configuration is still required but the SBC management is handled by the operator

You still need to configure network sites, subnets, and trusted IPs

This can simplify the deployment because you do not manage SBCs yourself, but you lose some control over the voice routing.

LBR Limitations You Must Know

Call Park — does not work with LBR enabled

Group Call Pickup — restricted with LBR

Call forwarding to PSTN — must comply with LBR rules (forwarded call must route through the correct gateway)

Simultaneous ring to PSTN — same LBR restrictions apply

Transfer to PSTN — the transfer must be evaluated against LBR policy

Users outside the corporate network — PSTN calls are blocked unless VPN is used

Mobile Teams app on cellular — PSTN calls blocked if not on corporate WiFi/VPN

Common Mistakes in India LBR Deployments

Incomplete subnet mapping — if a subnet is not mapped, users on that subnet are treated as "unknown location" and all PSTN calls are blocked

Forgetting guest WiFi subnets — if users connect to guest WiFi, their subnet may not be mapped

VPN subnet mismatch — VPN pool subnets must be mapped to the correct site

Not testing from every location — test PSTN calls from every office, every floor, every WiFi SSID

Ignoring the WFH scenario — work-from-home users need VPN with properly mapped subnets or they cannot make PSTN calls

Other Countries That Need LBR

While India is the primary market for LBR, other countries with toll bypass regulations may also require it. Always check local telecom regulations when deploying Teams Phone in:

Some Southeast Asian countries

Certain Middle Eastern countries

Some African nations with strict telecom regulations

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