According to one embodiment, there is provided a telephone system comprises terminal devices which process a signaling protocol, and a server which forms a session with each terminal device using a first protocol or a second protocol as a lower layer protocol of the signaling protocol. The terminal device comprises request module requests the server to form a session using the first protocol. The server comprises determination module, session forming module and switching module. The determination module determines permission or rejection to the request. The session forming module forms a session with a request source terminal device using the first protocol when the request is permitted, or using the second protocol when the request is rejected. The switching module switches the lower layer protocol of the session from the second protocol to the first protocol when the request from the terminal device is permitted.