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What is SMS – How does it work, what kinds of messaging are there & more

What is SMS & how businesses can use it

What is SMS?

SMS meaning is an acronym for “Short Message Service” that allows the exchange of plain text messages of up to 160 characters primarily between mobile devices, but also via telephone and internet, using protocols that are shared across all these platforms.

SMS was created as telecommunication infrastructure that shifted from analog to digital in the mid 80’s, finally being introduced to the public in 1992 when engineer Neil Papworth sent the first ever SMS on December 3; it said “merry Christmas;” the grammatical error is Mr. Papworth’s.

How does SMS work?

When you hit “send” on your SMS, whether it’s from a phone, app, or other SMS-capable mobile device, your message is translated into data and sent across an elaborate web of interconnected carrier networks. Your message will search for the quickest path to the designated recipient. Once there, the data is translated back into a message and is delivered to the device.

The reason SMS is called “Short Message Service” is the 160-character limit to messages that are able to be converted into a single data “packet.” Those packets are made up of 1s and 0s that translate to include your message, and some metadata or basic info about it (time stamp, the destination phone number, etc.). When you hit SEND, that message packet gets transmitted via wireless through the SMSC, or SMS Channel, to the nearest cell tower. Once there, the message finds its way to the recipient through the shortest route possible, landing at a tower near them and using the SMSC to deliver it to their mobile device. All of this only takes a few milliseconds, if the end recipient’s mobile device is turned on and in range. The nice thing about texting is that the message will wait in a queue in the SMSC to be delivered until that happens.

With modern mobile devices you may have noticed that messages longer than 160 characters are being sent to your phone and delivered as one message. Prior to this capability, we saw broken message fragments that sometimes arrived out of order. Longer messages are still being broken into smaller packets, but through the addition of a truncation notation to the metadata, the packets are able to be reassembled and delivered as one message. Truncation does depend on the delivering carrier, as some still do not support this.

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What are the different types of SMS?


Person-to-Person SMS (P2P) is text messaging traffic that is typical of human-to-human communications. P2P should not exceed one (1) message-per-second (MPS), and the balance of messages sent versus received should be approximately one-to-one.


Application-to-Person SMS (A2P) is text messaging that is sent from an application to a person, and is generally classified as business messaging. Unlike P2P messaging, A2P allows for automated texts to be sent, which can exceed the one message-per-second rates that P2P is required to adhere to. A2P requires special numbers, including toll-free, short codes, and sanctioned local numbers known as 10DLC (10 digit long code)


Multimedia Messaging Service (MMS) is a texting protocol used to send messages that contain multimedia content such as pictures, videos, audio, and GIFs. MMS allows for more characters than SMS, extending it beyond the 160 length of standard SMS.

Short Code

Short codes are 5 to 6 digit numbers used to send high-volume, high-throughput A2P texts. While short codes can’t be used for two-way communications, certain keywords (such as “Yes” or “C” to confirm and “STOP” to opt out) can be used as responses by recipients. Short codes cannot be used to make voice calls.

Toll-Free SMS

Toll-free SMS allows for high-volume, high-throughput texts to be sent over toll-free numbers (800, 888, etc). Most existing toll-free numbers can be enabled to send SMS. Unlike short codes, toll-free SMS allows for two-way communications, allowing recipients to reply as they would to a normal text or call the number if it’s been voice-enabled.


10 digit long codes (10DLC) are sanctioned 10 digit, local phone numbers that are approved for high-volume, high-throughput messaging much like short codes or toll-free numbers. Like toll-free numbers, 10DLC numbers can handle two-way communications and voice calling, but similar to short codes, they have an associated carrier fee to access the A2P route. The industry is currently in the process of implementing 10DLC so it’s not widely available yet, but should be by the end of 2020.

Message Deliverability SMS

Message deliverability

Before an SMS can be delivered, it goes through several steps. After being converted into data, it’s sent across a web of carrier networks to the recipient. As each carrier receives the data, they review it to see if it’s spam. The criteria for whether or not a message is handed off to be delivered varies by each carrier, but as a general rule falls into four areas:

  • The Sender: Does the sender regularly send these types of messages? Are their messages regularly blocked
  • How the message is being sent: Is the message being sent on the correct type of number? If the sender is using a P2P number to send A2P traffic, it can be blocked.
  • Message volume: based on the number being used, is the volume of messages correct?
  • The message content: Does the message contain illegal or disallowed content? Different types of URL shorteners can fall into this category and result in a message being blocked.

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Error codes & messaging ROI

Calculating the ROI of your SMS efforts relies on the use of error codes. Different codes represent different types of reasons for a message not being delivered. This can include anything from a carrier blocking the message because of spam, to a number not being able to receive the text (ie: if a message is sent to a landline).

Using error codes, a business can calculate their delivery rate and their ROI. It’s important to know that P2P SMS can only be tracked down to the carrier level, meaning you’ll only know that the delivering carrier received the message; toll-free and short code A2P can be tracked to the handset, giving you deeper insights into ROI.

Benefits of SMS

What are the benefits of SMS

High speed

Thanks to the small size (140 bytes) and how SMS is transmitted, it takes only seconds for a text message to be delivered. This is especially valuable during times when phone lines are inaccessible or jammed due to high volume, such as during emergencies or natural disasters, as SMS can be queued and delivered as capacity becomes available, unlike a phone call.


Because of the lower bandwidth requirement associated with the small message files being exchanged, SMS can often be used in areas that might be out of range for voice transmission. Using an SMS gateway, messages can be sent and received via email in situations where there is no mobile service at all.


SMS is 100% compatible across all hardware and software platforms with as many as 98% of mobile device users regularly using SMS. Unlike proprietary messaging systems, which are dependent upon a particular operating system, or require a specialized application be installed in order to send and receive SMS messages, anyone with a modern mobile phone device of any kind can send and receive SMS.

Open & response rates

SMS is proven to have much higher open rates than other mass marketing methods. At a time when many ignore notifications from apps by swiping them away without reading them, users are more compelled to view an SMS message than they would be a mass email or telemarketing call, with SMS having a 98% open rate, compared to 21% open rate for emails and only 8% for push notifications.


Because of the universal cross platform nature, and its low bandwidth requirements, SMS is considered to be highly reliable. Due to the lower bandwidth needs, SMS messages can be delivered to recipients in fringe reception areas. If a recipient’s device is out of range or turned off, SMS messages will be delivered when the phone connects to its carrier network. For desktop SMS users, range is not an issue. People will often interact with SMS in situations where other forms of communication might be impractical. Compared to voice and email, SMS presents much more immediate and reliable connectivity.

Money savings

For individuals, the rise of SMS has led carriers to move from a per message structure to flat fee pricing for unlimited messages. For businesses, SMS can help them realize savings by allowing them to remove or reduce operational costs, as there’s less human capital needed to manage SMS versus phone monitoring, which can be reduced to none if SMS responses are automated.

Versatility for businesses

The ability to integrate SMS across platforms, and it’s ubiquitous presence among consumers, gives businesses a level of flexibility and creativity that other communication methods don’t provide. The versatility of SMS is limited only by a business’ imagination, making it a powerful tool for communicating with customers.

How do business use SMS?

How do businesses use SMS?

SMS marketing

The ability to send promotional messages, coupons, and sales announcements directly to customers’ SMS inboxes, where they’re more likely to see your message and engage than email, is a boon for businesses looking to improve engagement and increase sales. It’s important to note that depending on the type of marketing materials you plan to send, there are specific opt-in requirements that you must adhere to to be in compliance with CTIA guidelines.


Whether sending a coupon code or a link to a digital coupon, SMS enables businesses to alert customers to sales and empowers them to take advantage of discounts offered via coupon without the need to remember to bring in anything other than the phones they already have with them.

Customer support

Integrating SMS into a business’ customer support structure allows for more efficient use of customer support representatives, enabling them to handle multiple requests simultaneously while still allowing customers to escalate to a voice call when the issue requires more direct, real-time communications. For contact centers this can mean improved efficiency without the need to invest in additional operational costs.

Alerts, notifications, & reminders

The high open rate of SMS makes it ideal for time-sensitive alerts, notifications, and reminders that businesses need their customers to see. Alerts about dangerous weather, notifications about changes to travel, and reminders about appointments are all ways the government and businesses can stay in contact with individuals. And, through SMS Gateways and other automation tools, many of these messages can be automated, helping to reduce operational costs.

Two-factor authentication

SMS enables businesses to verify the identity and login credentials of their customers, ensuring the security of their personal information. Two-factor authentication (2FA) can be used to verify users’ login information, or as a way to complete order verification, helping to eliminate compromised passwords by tying logins to a user’s mobile device.

2FA is a much more secure form of authentication than using passwords alone. 2FA via SMS is commonly used by banking institutions, e-commerce websites, and even government agencies to add a layer of protection to  identity verification. Even greater security measures can be facilitated through authentication apps like Google Authenticator or Okta, but 2FA is the most common and widely accepted alternative to protecting and verifying users today.

Group messaging

Group messaging enables three or more participants to send and receive messages. Depending on your device and carrier, up to 30 participants can be added to a group message. Group messaging can enable businesses to communicate with multiple interested parties at one time when time is an issue, such as when buying a home or arranging childcare.

See all the ways you can use SMS for your business

SMS Technology

SMS technology comparisons


SMS is limited to sending plain text messages and is limited to 160 characters. MMS can send videos, audio, images, and other media formats, including hyperlinks, to any device that is capable of receiving them (100% of iOS and Android devices can receive MMS). MMS also does not have the same character limits as SMS.

SMS vs Text

In the traditional definition, there is no difference. They are two words for the same thing—160 character plain text messages. However, many people refer to any messaging exchange as “texting” which confuses the landscape. Over-the-top applications like Facebook Messenger are not using SMS or MMS to exchange messages, and should be considered messaging apps, not texting platforms.


RCS, or Rich Communications Services, is a next generation SMS protocol that upgrades text messaging, but hasn’t seen the same adoption rate as SMS. RCS enables rich features like read receipts, suggested actions, high quality images, and large videos without having to compress  media. All Android devices are now being enabled to utilize RCS through Google Messages, but that will be proprietary to Androids, similar to iMessage for Apple.

SMS Vs iMessage

iMessage is proprietary to Apple and made for use with Apple devices. SMS is a cross platform standard of sending messages, compatible with Android, Apple, and other platforms, and is compliant with Global System for Mobile Communication (GSM) standards. While iMessage natively integrates SMS into the messaging platform, so users can text between Apple and non-Apple users seamlessly, it is also a type of over-the-top (OTT) application that primarily utilizes cellular data or internet to send messages between Apple iMessage users (think blue bubbles vs. green bubbles here, with green being SMS/MMS messages).

SMS vs Verified SMS

Verified SMS is an enhancement to standard SMS created by Google that provides an extra level of validation to texts sent by businesses by validating that the message came from that business and displaying that to the customer. Verified SMS allows for businesses to send a branded experience, displaying the company logo in each message, adding authenticity to the message’s origination. Verified SMS is intended to help reduce spam and allow customers that opt-in to receive SMS from a business to know that the texts they’re receiving are legitimate. Verified SMS is only enabled in Google Messages, and will be proprietary to Androids, similar to iMessage for Apple.

SMS vs WhatsApp

WhatsApp is a proprietary over-the-top (OTT) messaging application. While it runs across all software and hardware platforms, it requires that both the sender and recipient have the application installed on their devices and access to cellular data or internet in order to send messages. SMS does not require a separate application, and can be sent and received using default applications across multiple platforms with only regular wireless network access.

SMS Guidelines and Regulations

SMS Guidelines & Regulations

The CTIA (Cellular Telecommunications Industry Association) represents the US wireless industry and works to coordinate voluntary best practices and initiatives to maintain standards around SMS. Currently, those fall into two main categories: P2P and A2P.

Stricter definitions of P2P messaging

Person-to-Person SMS is now defined as having the following:

  • Messaging throughput of no more than 15-60 messages per second
  • Messaging volume of no more than 1,000 per day
  • A unique sender with only one telephone number assigned to or used by a single consumer.
  • Unique recipients with no more than 100 distinct receiving telephone numbers per message
  • A balance of a roughly 1:1 ration for outgoing and incoming messages per telephone number
  • Repetition of 25 or more substantially repetitive messages will flag messages as A2P instead of P2P
  • Industries that were previously accepted to for P2P use, including non-profits, political, and education services are now classified as A2P
  • Messages are strictly to be sent between consumers. Agents and businesses that demonstrate P2P traffic patterns are classified as A2P under these guidelines.

A2P opt-in requirements

The CTIA defined three (3) types of business messaging and laid out opt-in requirements for each one.

Conversational messaging

This is consumer-initiated messaging. Consent is implied, so no additional opt-in is required.

Informational messaging

This is when a consumer gives their phone number to a business and asks to be notified with account updates, appointments, and the like. Express consent is required, and the consumer may agree by completing a form via text, verbally, or on a website.

Promotional messaging

This is any SMS that’s promoting or marketing a business in any way. Express written consent is required for promotional messaging before a consumer can receive a text. Consumers can opt-in via a checkbox on a website, a signed form, or another web form that is continually tracked and managed.

These guidelines all exist to protect consumers and messaging as a channel for communication, both between individuals and between businesses and consumers.

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