SMS channel setup

What it does

The SMS channel lets customers text a number you own and have that arrive as a routed conversation in Copilot Service workspace. It is asynchronous by nature — the customer replies when they feel like it, the conversation stays open in the meantime, and representative affinity brings it back to the same person.

Key facts

Three providers are supported: Azure Communication Services, Twilio and Infobip. SMS is not supported over Azure direct routing.
Representatives cannot start an SMS conversation from the app. Outbound SMS is done with Power Automate flows, which is how proactive notification campaigns are built.
The Twilio path supports US phone numbers only. Number type is set per number as Long code, Short code or Toll free, and the number is entered as country code plus number with no spaces or punctuation.
Twilio setup needs the Account SID and Auth token, which are validated against Twilio when you save. You then paste the Dynamics-supplied inbound callback URL into the Messaging section of the number in the Twilio console — miss that and outbound works while inbound silently doesn't.
Twilio's link-shortening feature is explicitly not supported. Attachments (MMS) can be enabled in both directions, but new Twilio accounts block media files until you turn that security setting off.
The Azure Communication Services path requires the voice channel to be purchased and installed, and an ACS resource connected with SMS services enabled. Numbers need Send SMS or Send and receive SMS capability; existing voice-only numbers must be upgraded.
ACS numbers are synced into Dynamics from Copilot Service admin center > Channels > Phone numbers > Manage > Advanced > Sync. Toll-free numbers can be shared between the SMS and voice channels.
ACS number availability is regional and uneven: toll-free and short code in the US and Canada, short code and mobile numbers in the UK, mobile numbers only in Australia and much of northern Europe. Check before promising a number type.
File attachments are not supported on SMS via Azure Communication Services. They are supported on Twilio. This asymmetry decides the provider more often than price does.
Per-channel behaviours available: operating hours, custom automated messages and a post-conversation survey. Auto-close after inactivity is available on SMS workstreams.
Microsoft recommends submitting toll-free verification applications for toll-free numbers; unverified toll-free traffic gets filtered by US carriers.

When to use / skip

SMS earns its place in two situations: field and logistics scenarios where the customer is not sitting at a computer, and outbound notification patterns — appointment confirmations, delivery windows, "your case is resolved, reply STOP to opt out". For inbound support as a primary channel it is a poor fit in the UK and Europe, where customers reach for WhatsApp instead, and the numbering restrictions make it fiddly.

Skip it if the client's use case is really outbound-only marketing messaging; that belongs in Customer Insights - Journeys, not in a service workstream, and building it here means every send burns representative capacity for no reason. Also think twice if the client is US-heavy and wants short codes — the procurement and carrier registration timeline is measured in weeks, not days, and it will not fit inside a twelve-week delivery unless it starts on day one.

Configuration decisions

Provider: Twilio, Azure Communication Services or Infobip. Attachments, geography and whether the client already has a Twilio estate usually settle it.
Number type and country. Long code, short code or toll free, and the verification or registration work each implies.
Whether the same toll-free number serves voice and SMS (ACS only) or whether they stay separate for reporting clarity.
How consent and opt-out are handled. There is no built-in STOP handling to rely on — it is configured with the provider, or built into your flows.
Whether outbound SMS is in scope, and therefore whether Power Automate flows and a service account are part of the design.
Auto-close window on the workstream: how long a silent SMS conversation stays open before the system closes it.

Gotchas

The ACS SMS route quietly requires the voice channel licence and installation. Clients who wanted "just SMS" are surprised by this, and it changes the licensing conversation from a digital messaging add-on to a Contact Center one.
No attachments on ACS SMS. If the client's flagship demo is "customer texts us a photo of the broken part", you are on Twilio.
The Twilio inbound callback URL is a manual copy-paste into the Twilio console. It is the single most common reason inbound SMS doesn't arrive in a new environment, and there is no error anywhere in Dynamics to tell you.
Twilio SMS is US numbers only in this integration. UK and EU clients on Twilio find this out late.
Short code approval and toll-free verification are carrier processes outside your control. Build them into the plan as external dependencies with real lead times.
Representative affinity is on by default for SMS. A returning conversation goes back to the original representative regardless of their current capacity or presence, which will make concurrency reporting look odd until you account for it.

Consultant notes

Ask "inbound support or outbound notifications?" first. The answers point at completely different designs and, quite often, at a different product.
Get the number procured before the build sprint. Everything else in SMS is an afternoon's work; the number is the schedule risk.
Demo the async behaviour explicitly — send a text, close the laptop, reply an hour later, watch it come back to the same representative. Clients who have only seen chat do not expect this and it reframes their capacity planning.
Check the opt-out story with the client's legal team before go-live. Nobody wants their first SMS incident to be a compliance one.
If the client is European and asking for SMS, ask whether they actually mean WhatsApp. Half the time they do.

Worth checking again when ACS number availability expands or if attachment support lands on the ACS SMS path.