Native SMS support is now available in Microsoft Teams, but is it business-ready? At first glance, Microsoft's new SMS integration into Teams looks promising. But a closer look reveals critical limitations. With restricted features and incomplete functionality, it might suffice for occasional messaging, but businesses relying heavily on text communication could find it lacking. This article breaks down what Teams SMS offers and what it doesn't.

Key Takeaways:

1. Native but Limited:
Microsoft Teams now includes native SMS support, allowing basic SMS messaging directly within Teams Chat without switching apps. However, specialized messaging solutions offer significantly more functionality than this.

2. Regional and Licensing Restrictions:
Teams SMS is currently restricted to users in the United States, Puerto Rico, and Canada who have a Microsoft Teams Calling Plan, excluding organizations using Operator Connect, Direct Routing, or those based outside these regions.

3. Complex Setup and Compliance:
Organizations must complete cumbersome licensing requirements, including 10DLC brand registration without direct assistance from Microsoft, making setup complicated and potentially frustrating.

4. Missing Core Features:
Essential features such as MMS (images/videos), contact names display, sending messages to multiple numbers, adding SMS to a Teams channel (shared inbox numbers), and basic contact management tools are notably absent, significantly limiting usability for businesses with higher messaging needs. 

5. Lack of Advanced Messaging Capabilities:
Teams SMS does not support key business-oriented features, including group MMS Group Chat, multiple numbers per user, quick-reply shortcuts, CRM integration, AI-assisted responses, and real-time translations, restricting productivity and customer service effectiveness.

6. Limited Flexibility and Telephony Options:
SMS is exclusively tied to Microsoft’s own Calling Plans, excluding integration with third-party providers or alternative telephony setups like Operator Connect or Direct Routing, constraining flexibility and competitive choice.

7. Potentially Unpredictable Costs:
While initial SMS costs appear competitive, hidden carrier fees, overage charges, and the absence of included messages in certain plans (like Pay-as-you-go) can result in unexpectedly high and unpredictable messaging expenses.

8. SMS Gets Lost in Teams Chats:
SMS messages are intermingled with internal Teams Chat communication and notifications are the same, making it difficult to distinguish, organize, and prioritize external and internal communication.

8. Conclusion - Not Fully Business-Ready:
Although Teams SMS is a convenient addition for simple messaging scenarios, it fails to meet the advanced messaging demands of most businesses. Companies needing comprehensive, reliable, and scalable SMS capabilities would be better served by specialized third-party messaging solutions.

+ - + - + - + - + - + -

Teams SMS: Future-Proof or Future-Problem?

Microsoft Teams continues to evolve with new features and productivity tools. One of its most recent updates is the integration of native SMS support within its Teams Chat. This new feature enables users to send and receive SMS text messages directly through Teams, without having to switch apps.

On paper, this sounds like a fantastic addition and brings Microsoft’s unified collaboration tools closer to competing platforms like Zoom, Webex, RingCentral, and 8x8. But as is often the case with Microsoft right out the gate, the execution is far from perfect, and businesses looking for a robust SMS solution might find themselves disappointed by its limitations.

Who can use Microsoft Teams SMS?

As of now, Microsoft’s SMS feature is only available in the United States, Puerto Rico, and Canada. And it’s only for users who have a Teams Calling Plan. Unfortunately, if your business is outside of these regions, or if you use Operator Connect or Direct Routing (which many larger organizations do), this functionality will be completely out of your reach.

This creates an immediate divide between Microsoft’s native SMS offering and the more inclusive SMS capabilities of third-party services that cater to businesses regardless of their region or call plan configuration.

License Requirements: A Bit of a Roadblock

To enable SMS functionality within Teams, organizations must meet specific licensing requirements. In addition to Microsoft Teams itelf, key components include Teams Phone and Microsoft Teams Calling Plan.

In addition, users must complete 10DLC (10-digit long code) brand and campaign approval through the Microsoft portal before using SMS features. While these steps may not seem too complicated, the process can feel cumbersome for companies eager to get started quickly. It is equally frustrating that Microsoft’s SMS service, by default, supports no more than 49 Calling Plan numbers. Organizations requiring more than this must request an exception through Microsoft’s telephone service desk.

This limitation stems from T-Mobile's 10DLC number pooling requirements, which regulate the use of 10-digit numbers for SMS to prevent spam and ensure compliance. Approval for more than 49 numbers must, therefore, be sought to comply with T-Mobile's pooling rules.
A significant issue is that Microsoft does not provide direct assistance with 10DLC registration Businesses must handle the process themselves. This includes completing the necessary documentation and ensuring they comply with carrier guidelines for SMS campaigns. This hardly reflects the “seamless” integration that Microsoft promises.

What's Included in Microsoft Teams SMS?

Microsoft’s SMS functionality for Teams enables basic text messaging within the Teams Chat interface, but its capabilities are limited:

1. Send SMS

Users can send SMS to a phone number directly from a Teams Chat and receive replies within the same conversation thread.

2. Receive SMS

Receive SMS: Incoming SMS messages create a new Teams Chat, where users can choose to accept or block the conversation.

3. Opt-Out/Opt-In Controls

Users can reply with “STOP” to block future messages and “START” to resume communication.

While these features provide basic SMS functionality, Microsoft Teams SMS lacks many of the essential and advanced business messaging capabilities that businesses now expect.

Examining Teams SMS more closely exposes its key gaps.

What core features are missing from Teams SMS?

While Teams SMS can handle basic messaging, it lacks several fundamental SMS features that are standard on most mobile phones and messaging apps. The core features missing from Teams SMS are:

1. MMS Support

There is no ability to send or receive images, videos, or other attachments. This is a multimedia messaging capability that many businesses rely on.

2. Contact Display

Messages are shown only by phone number, not by contact name. This makes it difficult to identify senders and complicates the process of keeping track of ongoing conversations.

3. Message Broadcasting

There is no support for sending messages to multiple contacts simultaneously. For businesses, this is a significant inconvenience, particularly when quick, widespread communication is needed.

4. Shared Inboxes or Numbers

Teams SMS does not support shared inboxes or department-wide numbers, preventing teams from receiving and responding to SMS messages collectively within a Teams Channel, as they can with phone calls. This means SMS cannot be assigned to a main office or department phone number.

5. Contact Management

There are no built-in tools for saving, managing, organizing, or sharing contacts. This absence of a contact management system is a major drawback for businesses that handle large volumes of client interactions and need quick, streamlined access to contact information.

6. Separation of SMS and Teams Chats

SMS messages are mixed in with internal Teams Chats, making it hard to find, organize, and prioritize both external and internal communication. And as more internal messages come in, SMS messages get pushed further down the chat list, making it even harder to access important external communications.

7. RCS Support

Microsoft Teams SMS does not support RCS (Rich Communication Services), a more advanced messaging protocol that offers features such as read receipts, typing indicators, and better multimedia support. Without RCS, Teams SMS is limited to basic SMS functionality, lacking the modern communication features that customers and businesses often expect today.

In addition to lacking these key core features, Microsoft Teams SMS also falls short in several advanced capabilities that businesses rely on to maintain streamlined and efficient text-based communication:

What advanced features are missing from Teams SMS?

1. Group Chat

No support for MMS group chats.

2. Multiple Numbers Per User

The lack of multiple numbers or shared inboxes in Teams SMS limits businesses' ability to organize communication across departments. Without this feature, all messages are routed to a single inbox, creating inefficiencies, delays, and difficulty in managing conversations effectively.

3. Quick Reply Shortcuts

Teams SMS lacks built-in tools for creating response templates, making it harder to reply quickly and efficiently.

4. 2FA/MFA Support

There’s no support for sending or receiving SMS codes for two-factor or multi-factor authentication.

5. CRM Integration

Teams SMS does not integrate with CRM systems, making it challenging to manage contacts and save text conversations for each individual contact.

6. Real-Time Translation

There’s no multilingual support for real-time message translation.

7. AI-Assisted Responses

No AI functionality to help generate smarter, faster replies.

8. Out-of-Office Replies

Teams SMS does not support automatic out-of-office replies for SMS conversations.

9. Bring Your Own Number (BYON) or Custom SMS Provider Support

Microsoft Teams SMS currently doesn’t allow users to bring their own non-Microsoft phone numbers or use their preferred SMS service provider.

10. 10DLC REgistration Support

Microsoft does not provide direct assistance with 10DLC registration, leaving businesses responsible for managing the compliance process themselves.

Microsoft Ties SMS to Its Own Calling Plans

For businesses that use alternative methods for connecting their company’s telephony system to Microsoft Teams, such as Operator Connect or Direct Routing, a major limitation arises: SMS functionality is only available through Microsoft Calling Plans. This constraint complicates the integration of SMS into their Teams experience. It forces them to rely on Microsoft’s proprietary solution rather than a more flexible and potentially cheaper set up.

This challenge is even more pronounced for companies selling Direct Routing or Operator Connect voice services. Microsoft’s restriction of SMS functionality to its own Calling Plans creates a challenge, as it limits their ability to compete with Microsoft’s all-in-one bundled solution.

What Does Microsoft Teams SMS Cost?

Currently, SMS messaging is included in Microsoft’s Calling Plan, and many of the plans provide a specific number of SMS messages before additional charges are applied.

Overage Costs

• $0.0075 USD per inbound and outbound SMS in the United States & Puerto Rico
• $0.01028 CAD per inbound and outbound SMS in Canada

These rates exclude carrier fees, which typically add an average of $0.003 USD ($0.0041 CAD) per message, depending on the recipient’s carrier.

Final SMS Costs (Including Carrier Fees)

Watch Out for Unpredictable Costs

While the pricing structure appears competitive, users must stay vigilant about potential extra charges that could cause SMS expenses to spike. For instance, the Pay-as-you-go plan offers no included SMS, meaning all messages are subject to overage rates, which can quickly add up, especially for businesses that rely on frequent SMS communication.

Though the overage charges themselves are relatively low, they can accumulate significantly if users regularly exceed their plan limits. Moreover, these charges don’t include carrier fees, which can vary depending on the recipient’s carrier or region, leading to unpredictable costs. With both overage costs and carrier fees to manage, businesses must carefully monitor their SMS usage to avoid unexpected bills. Even when staying within plan limits, the absence of essential features like MMS, broadcast messaging, and contact management may leave businesses feeling they’re not receiving the full value expected from a premium service.

Final Thoughts

Microsoft Teams SMS is a convenient addition to the platform’s collaboration suite, but it’s far from a fully-fledged business solution. While it may work for smaller organizations with basic messaging needs, its lack of advanced features—like MMS, message broadcasting, and CRM integration—limits its appeal. Licensing restrictions, 10DLC complexities, and unpredictable costs add further friction. Instead of a game-changing innovation, Teams SMS feels more like a supplemental tool. For businesses needing a robust, flexible messaging solution, third-party integrations or alternative platforms may be the smarter choice.

+ - + - + - + - + - + -

Ditch the Limits! Power Up With YakChat

If your business needs more than just the basics, YakChat is the leading third-party solution for native SMS integration into Microsoft Teams. Unlike Microsoft's limited SMS offering, YakChat delivers a fully featured business messaging experience, ensuring seamless and powerful communication without restrictions.

YakChat enhances Microsoft Teams with the advanced SMS features that modern businesses rely on:

• MMS and RCS Support: Send and receive images, videos, and rich media messages.
• Shared Inboxes & Numbers: Enable teams to collaborate on customer messages effortlessly.
• Contact Management & Display: Save, organize, and display contact names instead of just phone numbers.
• Message Broadcasting: Send bulk messages to multiple recipients at once.
• CRM Integration: Sync messaging with your customer management tools for a unified workflow.
• Multiple Numbers Per User: Manage different business lines from a single interface.
• Real-Time Translations & AI-Assisted Replies: Communicate across languages with intelligent response suggestions.
• No Microsoft Calling Plan Required: Use YakChat with Direct Routing, Operator Connect, or your existing phone numbers.

While Microsoft has included basic SMS in Microsoft Teams which may be good for YakChat ensures businesses have a truly scalable and efficient SMS solution—one that boosts productivity, enhances customer engagement, and adapts to any telephony setup.
If your business relies on SMS, don’t settle for less.

References:

 https://learn.microsoft.com/en-gb/microsoftteams/sms-management

 https://support.microsoft.com/en-gb/office/send-and-receive-sms-in-microsoft-teams-a7d163cb-3562-4f4a-b1c1-81c722c1a0f1

 https://cdn-dynmedia-1.microsoft.com/is/content/microsoftcorp/microsoft/final/en-us/microsoft-product-and-services/microsoft-365/pdf/816860-teams-sms-pricelist.pdf

 https://www.xda-developers.com/microsoft-teams-finally-gets-sms-messaging-but-there-is-a-catch/

 --------------------------